ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year warranty contract for P2,000 that requires the entity to perform periodic services and replace defective parts. In 2022, ABC sold 550 television sets and 400 extended warranty contracts for cash. The entity
ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year warranty contract for P2,000 that requires the entity to perform periodic services and replace defective parts. In 2022, ABC sold 550 television sets and 400 extended warranty contracts for cash. The entity
ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year warranty contract for P2,000 that requires the entity to perform periodic services and replace defective parts. In 2022, ABC sold 550 television sets and 400 extended warranty contracts for cash. The entity
18. ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year warranty contract for P2,000 that requires the entity to perform periodic services and replace defective parts. In 2022, ABC sold 550 television sets and 400 extended warranty contracts for cash. The entity estimates the two-year warranty costs as P1,200 for parts and P600 for labor and accounts for warranties separately. The sale occurred on December 31, 2022. The entity recognizes income from the warranties based on the actual warranty availed by the customers within the warranty period. Expired warranties are closed to income from warranties. In 2023, 30% of sold warranties were availed by customers. How much is the unearned revenue from warranty contracts to be presented in the statement of financial position as of the year ended 2023?
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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