15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: What amount should COCONUT report as its estimated liability as of December 31, 2021? a. ₱ 740,000 b. ₱ 40,000 c. ₱ 240,000 d. ₱ 540,000

15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: What amount should COCONUT report as its estimated liability as of December 31, 2021? a. ₱ 740,000 b. ₱ 40,000 c. ₱ 240,000 d. ₱ 540,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: help

A: Answer

Q: In 2020, KD Corporation began selling a new line of products that carry a two-year warranty against…

A: Warranty is a form of assurance given by the seller to the buyer that in case any defect came out in…

Q: On January 1, 2021, ACORN Company offered a three-year warranty from date of sale on any of its…

A: Expected Warranty cost = (Sales - sales return) x 2% = (₱9,000,000 - ₱9,000,000*1/5) x 2% = ₱144,000

Q: On December 31, 20x3, the carrying value of the loan receivable is approximately

A: Interest is the periodic obligation of the borrower to pay towards the sum borrowed. It is computed…

Q: On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment.…

A: Equipment recorded value = Present value of face value of note + Present value of interest payments…

Q: Required: 1-a Prepare the year-end entries for any amounts that should be recorded as a result of…

A: The liability that may or may not have the potential to take place due to unpredictable future event…

Q: • Allan Company had sales of $1,500,000 during 2021. Actual warranty costs during 2021 were $60,000.…

A: A warranty is a written guarantee that is given by the seller to the buyer for the product against…

Q: x Your answer is incorrect. How much total revenue should be recognized in 2023? Revenue recognized…

A: Interest = Face value of bonds - Fair value of goods= $7,920 - $7,200= $720

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

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

Q: Ivanhoe Roads accepted a customer's $101400 zero-interest-bearing six-month note in a sales…

A: Lets understand the basics.Interest Revenue is the amount of interest earned on interest-bearing…

Q: The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its…

A: Step 1 The warranty expense is $5,000,000. It is obtained by adding the product of the number of…

Q: During 2019, Angel Co. introduced a new line of appliances that carry a three-year warranty against…

A: Answer - A warranty liability is a liability account in which a company records the amount of the…

Q: H9.C6 On October 29, Lobo Company began operations by purchasing razors for resale. The razors have…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: 16. On 1 January 2022, Marina Tower exchanged equipment for an $800,000 zero-interest-bearing note…

A: When more than one asset is purchased at the lumpsum price then the cost is allocated to the…

Q: Habek Hardware Inc. provides a product warranty for defects on two major lines of items sold since…

A: Warranty: Warranty expense is the amount that a company needs to pay to the customers in case the…

Q: During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The…

A: The liabilities are the amount due to be paid in near future. The warranty Expenses are estimated…

Q: FDN Company received a 60-day 10% promissory note as settlement for goods sold on March 1, 2022 for…

A: The amount to be received at the time of the maturity of the promissory note include the principal…

Question

15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows:

What amount should COCONUT report as its estimated liability as of December 31, 2021?

a. ₱ 740,000

b. ₱ 40,000

c. ₱ 240,000

d. ₱ 540,000

Year of sale .
3 percent
Year after sale
5 percent
Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021,
are as follows:
Actual Warranty
Sales
Expenditures
P 200,000
700,000
2020
P 8,000,000
2021
10,000,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Cardinal Company, a dealer in lawn equipment, accepted a 6 month note receivable from a customer on September 1, 2020 that will come due on March 1, 2021. If Cardinal Company's fiscal year ends on December 31, 2020, the interest revenue earned would be recognized from the note receivable on: (Remember The Revenue Recognition Principle) A. on December 31, 2020 only B. on September 1, 2020 C. on March 1, 2021 only D. on December 31, 2020 and March 1, 2021
N11. Account
A company sold goods to a customer in exchange for a 5-year, zero-interest-bearing note on January 1, 2021. The note has a face amount of $244,000. The company imputes a 10% interest rate on this zero-interest note transaction. Present value factor for 10% and 5 years, single sum is 0.62. What is the sales revenue the company should record related to this transaction? (Please do not use your own present value tables or financial calculator.) (Please do not round your answer in any part of the computation.)
7
1. A company maintains an allowance for doubtful accounts related to its credit sales. For each credit sale, 1% is estimated to be uncollectible. A company recently made a credit sale of $50,000, and the cost of goods sold related to the transaction was $40,000. What journal entries should be made related to this sale? 2. A company estimates its future warranty obligations at the time a sale is made. This estimate is 2% of sales. The company recently sold $100,000 in a cash sale that had an associated cost of goods sold of $70,000. What journal entries should be made related to this sale?
EA7. LO 122 Homeland Plus specializes in home goods and accessories, In order for the company to expand its business, the company takes out a long-term loan in the amount of S650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. G. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first…
Yu.21.
a. 450,000 and 370,000b. 720,000 and 450,000c. 720,000 and 500,000d. 240,000 and 300,000
unc.5
During 2020, Red Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 4% within 12 months following sale and 6% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales Actual Expenditures2020 P5,000,000 P150,0002021 6,000,000 550,000At December 31, 2021, what would be reported as estimated warranty liability?a. P360,000 b. P400,000 c. P240,000 d. P50,000
p32
What amount should be reported as the warranty liability for 2021 and 2022, respectively?* a. 20,000 and 170,000 b. 170,000 and 650,000 c. 500,000 and 650,000 d. 500,000 and 170,000