58. Arno Corp.’s liability account balances at June 30, year 2,
included a 10% note payable in the amount of $1,800,000. The note is
dated October 1, year 1, and is payable in three equal annual
payments of $600,000 plus interest. Arno does not elect the fair value
option for reporting this financial liability. The first interest and
principal payment was made on October 1, year 2. In Arno’s June 30,
year 3 balance sheet, what amount should be reported as accrued
interest payable for this note?
59. Which of the following contingencies should generally be accrued
on the balance sheet as a liability when the occurrence of the
contingent event is reasonably possible and its amount can be
reasonably estimated?
60. Office supplies were ordered by Dwyer Company from Orcutt
Company on December 15, year 1. The terms of sale were FOB
destination. Orcutt shipped the office supplies on December 28, year
1, and Dwyer received them on January 3, year 2. When should
Dwyer record the account payable?
61. A state requires quarterly sales tax returns to be filed with the
sales tax bureau by the 20th day following the end of the calendar
quarter. However, the state further requires that sales taxes collected
be remitted to the sales tax bureau by the 20th day of the month
following any month such collections exceed $500. These payments
can be taken as credits on the quarterly sales tax return.
Taft Corp. operates a retail hardware store. All items are sold subject
to a 6% state sales tax, which Taft collects and records as sales
revenue. The sales taxes paid by Taft are charged against sales
revenue. Taft pays the sales taxes when they are due. Following is a
monthly summary appearing in Taft’s first quarter year 2 sales
revenue account:
62. In its financial statements for the quarter ended March 31, year 2,