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Current Liabilities Bon Nebo Co. sold 19,000 annual subscriptions of Bjorn for $49 during December 20Y5....

Current Liabilities Bon Nebo Co. sold 19,000 annual subscriptions of Bjorn for $49 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of $588,000 during the first calendar quarter of 20Y6. The federal tax rate is 38%. A quarterly tax payment will be made on April 12, 20Y6. Prepare the “Current liabilities” section of the balance sheet for Bon Nebo Co. on March 31, 20Y6. Bon Nebo Co. Current Liabilities Section of Balance Sheet March 31, 20Y6 Current liabilities: Advances on magazine subscriptions $ Federal income taxes payable Total current liabilities $

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Answer #1
Current Liabilities:
Advance of Magazines subscriptions 6,98,250
Federal Income tax payable 223440
Total current liabilities 9,21,690
Note:
Advance received in Dec 2005 (19000*49) 931000
Less: revenue to be recognized for 3 months 232750
(931,000*3/12)
Advance of Magazine subscription balance on Mar31 698250
Federal Income tax payable:
Taxable income 5,88,000
Multiply: Tax rate 38%
Federal Income tax payable: 2,23,440
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