**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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H1.
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Your answer is partially correct. Nash Taco Palace sells 320 gift cards at $60 per gift card and 160 of the gift cards are redeemed by year-end. Nash estimates that it will have 10% breakage on its gift cards. Prepare the entry for the gift card redemption and the expected breakage for the gift cards in the current year. (Ignore Cost of Goods Sold.) (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. List oll debit entries before credit entries. Round intermediate calculations to 4 decimal places, eg. 0.2456 and final answers to 0 decimal places, eg. 5,125) Account Titles and Explanation Unearned Gift Card Revenue Sales Revenue Sales Revenue (Breakage) eTextbook and Media. Debit Credit 9600
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