A company sold 8,000 units of its signature product for the calendar year ended December 31, 2020. Each unit is sold at P 45,000 including a one- year warranty on its parts. The company expects 3.50% of the products would be defective and that repair costs would costs them P 2,750.00 per unit. For 2020, 235 units were repaired for a total cost of P 640,375.00. Assuming that the Provision for Warranty account had a beginning balance at January 1, 2020 of P 297,730.00, determine the Provision for Warranty balance as of December 31, 2020.

A company sold 8,000 units of its signature product for the calendar year ended December 31, 2020. Each unit is sold at P 45,000 including a one- year warranty on its parts. The company expects 3.50% of the products would be defective and that repair costs would costs them P 2,750.00 per unit. For 2020, 235 units were repaired for a total cost of P 640,375.00. Assuming that the Provision for Warranty account had a beginning balance at January 1, 2020 of P 297,730.00, determine the Provision for Warranty balance as of December 31, 2020.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...

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