(Learning Objective 1, 5: Reporting current and long term liabilities) Assume that Pinnacle Golf Equipment completed these selected transactions during December 20X7.
a. Sales of $2,000,000 are subject to estimated warranty cost of 3%. The estimated warranty payable at the beginning of the year was $30,000, and warranty payments for the year totaled $55,000.
b. On December 1, Pinnacle signed a $100,000 note payable that requires annual payments of $20,000 plus 9% interest on the unpaid balance each December 1.
c. Academy Sports, a chain of sporting goods stores, ordered $100,000 of golf equipment. With its order, Academy Sports sent a check for $100,000, and Pinnacle shipped $85,000 of the goods. Pinnacle will ship the remainder of the goods on January 3, 20X8.
d. The December payroll of $100,000 is subject to employee withheld income tax of 9% and FICA tax of 8%. On December 31, Pinnacle pays employees their take home pay and accrues all tax amounts.
Required
Classify each liability as current or long term and report the liability and its amount that would appear on the Pinnacle Golf Equipment balance sheet at December 31, 20X7. Show a total for current liabilities.