C is corrent. The 12/31/Y2 liability for returnable deposits can be determined by setting up a T-account.
Deposits (10,000,000 × $.05 = $500,000) are debited to cash and credited to the liability account, while deposits returned (11,000,000 × $.05 = $550,000) are debited to the liability account and credited to cash. The 12/31/Y2 balance of $100,000 is a current liability since the outstanding deposits are expected to be returned within the next year. The year 6 rent collected in advance ($25,000) is a noncurrent liability since the obligation will not be satisfied within 1 year of the balance sheet date.A is incorrect. The 12/31/Y2 liability for returnable deposits can be determined by setting up a T-account.
Deposits (10,000,000 × $.05 = $500,000) are debited to cash and credited to the liability account, while deposits returned (11,000,000 × $.05 = $550,000) are debited to the liability account and credited to cash. The 12/31/Y2 balance of $100,000 is a current liability since the outstanding deposits are expected to be returned within the next year. The year 6 rent collected in advance ($25,000) is a noncurrent liability since the obligation will not be satisfied within 1 year of the balance sheet date.B is incorrect. The 12/31/Y2 liability for returnable deposits can be determined by setting up a T-account.
Deposits (10,000,000 × $.05 = $500,000) are debited to cash and credited to the liability account, while deposits returned (11,000,000 × $.05 = $550,000) are debited to the liability account and credited to cash. The 12/31/Y2 balance of $100,000 is a current liability since the outstanding deposits are expected to be returned within the next year. The year 6 rent collected in advance ($25,000) is a noncurrent liability since the obligation will not be satisfied within 1 year of the balance sheet date.D is incorrect. The 12/31/Y2 liability for returnable deposits can be determined by setting up a T-account.
Deposits (10,000,000 × $.05 = $500,000) are debited to cash and credited to the liability account, while deposits returned (11,000,000 × $.05 = $550,000) are debited to the liability account and credited to cash. The 12/31/Y2 balance of $100,000 is a current liability since the outstanding deposits are expected to be returned within the next year. The year 6 rent collected in advance ($25,000) is a noncurrent liability since the obligation will not be satisfied within 1 year of the balance sheet date.
