You have been asked to review the december 31, 2021, balance sheet for champion cleaning. after completing your review, you list the following three items for discussion with your superior: an investment of $36,000 is included in current assets. management has indicated that it has no intention of liquidating the investment in 2022. a $160,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on march 31, 2022. deferred revenue of $78,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2022, and the other one-third in 2023. determine the appropriate classification of each of these items. (if no entry is required for classification, choose "no entry".)

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?