Diversified semiconductors sells perishable electronic components. some must be shipped and stored in reusable protective containers. customers pay a deposit for each container received. the deposit is equal to the container’s cost. they receive a refund when the container is returned. during 2018, deposits collected on containers shipped were $850,000. deposits are forfeited if containers are not returned within 18 months. containers held by customers at january 1, 2018, represented deposits of $530,000. in 2018, $790,000 was refunded and deposits forfeited were $35,000. required: 1. prepare the appropriate journal entries for the deposits received and returned during 2018. 2. determine the liability for refundable deposits to be reported on the december 31, 2018, balance sheet.

1.

(a)

Cash A/c     Dr.  $850,000

To Liability for refundable deposits  $850,000

(b)

Liability for refundable deposits A/c   Dr.  $790,000

To Cash A/c                                                                  $790,000

(c)

Liability for refundable deposits A/c       Dr.  $35,000

To Sale of containers                                                     $35,000

(d)

Cost of goods sold A/c             Dr.    $35,000

To Inventory of containers                               $35,000

2. The liability for refundable deposits to be reported on the December 31, 2018, balance sheet:

= Liability for refundable deposits, January 1, 2018 + Deposits received during 2018 - Deposits returned during 2018 - Deposits forfeited during 2018

= $530,000 + $850,000 - $790,000 - $35,000

= $555,000

a progressive tax is a tax that imposes a lower tax rate on low-income earners compared to those with a higher income, making it based on the taxpayer's ability to pay. that means it takes a bigger percentage from high income earners than it does from low income people.