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Marr Co. sells its products in reusable containers. The customer is charged a deposit for each container delivered and receives a refund for each container returned within two years after the year of delivery.Marr accounts for the containers not returned within the time limit as being retired by sale at the deposit amount. Information for 20X5 is as follows:Container deposits at December 31, 20X4 from deliveries in:20X3 $150,00020X4 430,000 $580,000Deposits for containers delivered in 20X5 780,000Deposits for containers returned in 20X5 from deliveries in:20X3 $ 90,00020X4 250,00020X5 286,000 626,000In Marr's December 31, 20X5 balance sheet, the liability for deposits on returnable containers should beA. $494,000B. $584,000C. $674,000D. $734,000

Respuesta :

Answer:

C. $674,000

Explanation:

The answer is calculated as :

Deposits for containers delivered in 20X5 + Deposits for containers returned in 20X5 - Deposits for containers returned in 20X5 from deliveries in 20X5 - Sales credited = The liability for deposits on returnable containers.

$580,000 + $780,000 - $626,000 -$60,000 = $674,000

Customers from 20X3 still hold some containers $150,000 - $90,000 = $60,000 which is the sales credited as the two year refund warranty is expired.

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