1. What is the warranty expense for 2020?2. What is the warranty liability on December 31, 2020? In 2020, Dubious Company began selling new line of products that carry a two-yearwarranty against defects. Based upon past experience with other products, the entityestimated Warranty costs as a percentage of peso sales.First year of warrantySecond year of warranty2%5%20205,000,000100,0002021Sales7,000,000300,000Actual warranty cost

The warranty expense is generated based on the percentage of sales.

Answered: 1. What is the warranty expense for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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EA14. LO 9.6 Arvan Patel is a customer of Bank’s Hardware Store. For Mr. Patel’s latest purchase on January 1, 2018, Bank’s Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Bank’s Hardware Store for the following transactions. Note issuance Subsequent interest entry on December 31, 2018 Honored note entry at maturity on December 31, 2019. Solution
Calculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 7
1. Which of the following modification of terms will not qualify for derecognition of financial liability? * a. A P1,000,000 bonds payable was due for payment on September 01, 2019. The maturity date has been extended up to September 01, 2020 with the face amount still the same. b. The market rate of interest associated with 2,500 bonds was 10% when these bonds were sold. Present value of the bonds was computed based on this percentage. Months later, prices in the market significantly changed making a shift from 10% to 11.5% effective rate. c. P375,000 of interest that accrued from the last date of interest payment up to the present time has been condoned or forgiven. The face amount though of P5,000,000 is unchanged and would be paid at the original date stated on the bond indentures. d. A previous P2,000,000 bonds was replaced by another bond payable of the same amount but with a different nominal rate of 9% instead of the old 11% rate.
H1.
Calculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 4
Calculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 6
Early in 2020, Kingbird Equipment Company sold 600 Rollomatics at $5,400 each. During 2020, Kingbird spent $21,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. (a) Your Answer Correct Answer (Used) Your answer is partially correct. Prepare 2020 entries for Kingbird. Assume that Kingbird estimates the total cost of servicing the warranties in the second year will be $31,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit At Sale cash 3240000 Sales Revenue 32 During 2020 Warranty Expense 21000 Unearned Warranty Revenue Dec. 31, 2020 Warranty Expense 31000
A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle, whichever is longer. O True O False
Calculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 4
ff1

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1. What is the warranty expense for 2020? 2. What is the warranty liability on December 31, 2020?