Help Accounting Questions 10 MarksQuestion: 1Outback Camera Co. was organized to sell a single product that carries a 60-day warranty against defects. Engineeringestimates indicate that 5% of the units sold will prove defective and require an average repair cost of $40 per unit. DuringOutback's first month of operations, total sales were 400 units; by the end of the month, 6 defective units had been repaired.The liability for product warranties at month-end should be $a. $370b. $930c. $680d. $445Question: 2Adam Inc. had assets of $255,000 and liabilities of $127,000 at the beginning of the year. During the year, revenues were$143,000 and expenses were $91,000. Also, during the year the business paid the owners a dividend of $5,000 and assetsincreased by $21,000.What were Adam's total liabilities at the end of the year?a. $101,000b. $145,000c. $195,000d. $246,000

1. Answer: b. $930 Calculation:1. Expected defective units:Total sales × Estimated defect rate = 400…

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EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 9PROB

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12 Warranty Costs Milford Company sells a motor that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, two percent of the units sold will require repair at an average cost of $125 per unit. The following data reflect Milford's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 34,500 33,000 37,500 105,000 180 270 195 240 330 315 690 525 315 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)
Instructions Chart of Accounts General Journal Instructions X Ecco Company sold $145,000 of Kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 9% of the sales price. On October 15, a customer required a $100 part replacement, plus $86 labor under the warranty. Required: Provide the journal entry for (a) the estimated expense on September 30 and (b) the October 15 warranty work Refer to the Chart of Accounts for exact wording of account titles
Modem Appliances, Inc. sells food processors for $150 with a 120-day warranty against defects. Past experience indicates that 5% of the processors will have some defect during the warranty period and that the necessary repairs and adjustments will cost $25 per defective unit. Sales for August are $225,000. What is the estimated liability for product warranties for units sold in August? Select one: a. $3,000 b. $1,800 C. $11,250 d. $1,875 e. None of the above
Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $35 per unit. The following data reflect Brigham's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 36,000 34,000 45,000 115,000 320 550 230 210 360 410 1,080 590 410 Calculate the estimated liability for product warranties at December 31. $ 168,510 x (Assume that warranty costs of known failures have already been reflected in the records.)
Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $105 per unit. The following data reflect Brigham's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 54,000 51,000 67,500 172,500 480 825 345 315 540 615 1,620 885 615 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)
PROBLEM 17: You are engaged to audit the December 31, 2012, financial statements of LIZA COMPANY, a manufacturer of household appliances. Your audit disclosed the following situations. a. In June 2012, the company began producing and selling a new line of dishwasher. By the end of the year, it had sold 120,000 to various dealers for P15,000 each. The product was sold under a l-year warranty, and the company estimates warranty costs to be P750 per dishwasher. Liza had paid out P30 million in warranty expenses as of December 31, 2012, which also the amount shown as warranty expense in its income statement for the current year. b. In response to your letter of audit inquiry, Liza's lawyer informed you that the company is involved in a lawsuit for violation environmental laws regulating hazardous waste. Although the litigation is pending, Liza's lawyer is certain that Liza will most probably have to pay cleanup costs and fines of P5,500,000. Liza neither accrued nor disclosed this loss in…
Practice Question During year 1, Gum Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to sales are 2% within twelve months following the sale and 4% in the second twelve months following the sale. Sales and actual warranty expenditures for the years ended December 31, year 1 and year 2, are as follows: Actual warranty expenditures $2,250 7,500 $9,750 Year 1 Year 2 Sales $150,000 250,000 $400,000 AICPA.920535FAR What amount should Gum report as estimated warranty liability in its December 31, year 2 balance sheet?
need help with B.
E10-7A Warranty Costs Milford Company sells a motor that carries a 3-month unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $60 per unit. The following data reflect Milford’s recent experience: October November December Dec.31 Total Units sold 23,000 22,000 25,000 70,000 Known product failures from sales in: October 120 180 160 460 November 130…
Check my work 10 The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,240. During the period, a customer returned a product that cost $930 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase or a - for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require entry.) Hint Ask Print CHAIR COMPANY Horizontal Statements Model Balance Sheet Income Statement Statement of Cash Flow Stockholder's Equity Event Assets Liabilities + Revenue - Expense = Net Income Estimates Paid

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