**Transcription for Educational Website:** --- ### Required Information *The following information applies to the questions displayed below.* Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems and it backs each notebook it resells with a 90-day warranty against defects. Based on past experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $520,000. Actual warranty expenditures in January of the following year were $19,000. **Required:** 1. Does this situation represent a contingent liability? - Yes or No [Options: Yes / No] --- The content appears as a scenario discussing business operations and warranty liabilities relevant to accounting or finance studies. No graphs or diagrams are present in this section.

Transcription for Educational Website: --- ### Required Information The following information applies to the questions displayed below. Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems and it backs each notebook it resells with a 90-day warranty against defects. Based on past experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $520,000. Actual warranty expenditures in January of the following year were $19,000. Required: 1. Does this situation represent a contingent liability? - Yes or No [Options: Yes / No] --- The content appears as a scenario discussing business operations and warranty liabilities relevant to accounting or finance studies. No graphs or diagrams are present in this section.

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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Hi, I think I have part 1 correct as listed below, but I need help with the second part with the Accrued Warranty Payable T account in Question 2.
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Creative Computing sells a tablet computer called the Protab. The $890 sales price of a Protab Package includes the following: • One Protab computer. • A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. • A coupon to purchase a Creative Probook e-book reader for $270, a price that represents a 40% discount from the regular Probook price of $450. It is expected that 25% of the discount coupons will be utilized. • A coupon to purchase a one-year extended warranty for $65. Customers can buy the extended warranty for $95 at other times if they do not use the $65 coupon. Creative estimates that 30% of customers will purchase an extended warranty. • Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $870.…
! Required Information Saved [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty When a razor is returned, the company discards it and malls a new one from Merchandise Inventory to the customer. The company's cost per new razor is $16 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,800 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $14,400 cash. Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $9,600 cash. Replaced 29 razors…
5 Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,200 list price. Bally dated the invoice July 31 with 10 EOM terms. Intel receives a 40% trade discount. Intel pays the invoice on August 13. On August 09, Intel Corporation returns $900 of the machinery due to defects. What does Intel pay Bally on August 13? Payable amount to Bally
Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chains