Accrued Product WarrantyHarbour Company disclosed estimated product warranty payable for comparative years as follows:(in millions)Current Year Prior YearCurrent estimated product warranty payable$14,047$13,467Noncurrent estimated product warranty payable8,5447,530Total$22,591$20,997Assume that Harbour's sales were $165,663 million in current Year and that the total paid on warranty claims during the current year was $14,481 million.a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cashthe business relative to the quick current assets and other longer-termb. Provide the journal entry for the Current Year product warranty expense. Enter your answers in millions.c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

Introduction Accrued Warranty expense is the cost that business expects to incur or already incurred…

Answered: Accrued Product Warranty Harbour…

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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Accrued Product Warranty General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 Current estimated product warranty payable $3,059 $2,884 Noncurrent estimated product warranty payable 4,327 4,147 Total $7,386 $7,031 Presume that GM's sales were $135,592 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands on the business relative to the quick current assets and other longer-term demands . Feedback Review the need for a classified balance sheet. b. Provide the journal entry for the Year 2 product warranty expense. Product Warranty Expense Product Warranty Payable
Liability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Date Transaction Feb. 15. Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. Mar. 17. Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account. May 16. Paid Kirkwood Co. the amount owed on the note of March 17. June 15. Borrowed $140,400 from Triple Creek Bank, issuing a 60-day, 8% note. July 21. Purchased tools by issuing a $120,000, 90-day note to Poulin Co., which discounted the note at the rate of 9%. Aug. 14. Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $140,400. (Journalize both the debit and credit to the notes payable account.) Oct. 13. Paid Triple Creek Bank the amount due on the note of August 14. Oct. 19. Paid Poulin Co. the amount due on the note of July 21. Dec. 1. Purchased equipment from Greenwood Co. for…
Item Prior year Current year Accounts payable 8,109.00 7,758.00 Accounts receivable 6,059.00 6,782.00 Accruals 1,036.00 1,609.00 Cash ??? ??? Common Stock 11,891.00 11,189.00 COGS 12,683.00 18,018.00 Current portion long-term debt 4,980.00 4,993.00 Depreciation expense 2,500 2,813.00 Interest expense 733 417 Inventories 4,192.00 4,777.00 Long-term debt 13,329.00 13,523.00 Net fixed assets 50,636.00 54,376.00 Notes payable 4,329.00 9,999.00 Operating expenses (excl. depr.) 13,977 18,172 Retained earnings 28,278.00 29,801.00 Sales 35,119 47,221.00 Taxes 2,084 2,775 What is the firm's total change in cash from the prior year to the current year?
Item Prior year Current year Accounts payable 8,194.00 7,893.00 Accounts receivable 6,066.00 6,786.00 Accruals 977.00 1,572.00 Cash ??? ??? Common Stock 11,869.00 12,264.00 COGS 12,616.00 18,108.00 Current portion long-term debt 5,038.00 5,064.00 Depreciation expense 2,500 2,825.00 Interest expense 733 417 Inventories 4,145.00 4,778.00 Long-term debt 13,680.00 14,055.00 Net fixed assets 50,966.00 54,551.00 Notes payable 4,331.00 9,956.00 Operating expenses (excl. depr.) 13,977 18,172 Retained earnings 28,104.00 29,983.00 Sales 35,119 45,456.00 Taxes 2,084 2,775 What is the firm's net income in the current year? . .
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Accrued Product Warranty Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: (in millions) Current estimated product warranty payable Noncurrent estimated product warranty payable Year 2 $16,211 9,860 $26,071 Year 1 $15,542 8,690 $24,232 Total Presume that Lachgar's sales were $211,240 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $16,712 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Year 2 product warranty expense. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Item Prior year Current year Accounts payable 8,109.00 7,758.00 Accounts receivable 6,059.00 6,782.00 Accruals 1,036.00 1,609.00 Cash ??? ??? Common Stock 11,891.00 11,189.00 COGS 12,683.00 18,018.00 Current portion long-term debt 4,980.00 4,993.00 Depreciation expense 2,500 2,813.00 Interest expense 733 417 Inventories 4,192.00 4,777.00 Long-term debt 13,329.00 13,523.00 Net fixed assets 50,636.00 54,376.00 Notes payable 4,329.00 9,999.00 Operating expenses (excl. depr.) 13,977 18,172 Retained earnings 28,278.00 29,801.00 Sales 35,119 47,221.00 Taxes 2,084 2,775 What is the firm's cash flow from investing?
Accrued Product Warranty Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $11,050 $10,595 Noncurrent estimated product warranty payable 6,721 5,924 Total $17,771 $16,519 Assume that Harbour's sales were $130,324 million in current Year and that the total paid on warranty claims during the current year was $11,392 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term . b. Provide the journal entry for the current Year product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank. fill in the blank d3bc3bf67fec01d_2 fill in the blank d3bc3bf67fec01d_3 fill in the blank…
Liability Transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Feb. 15. Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. Mar. 17. Issued a 60-day, 8% note for $144,000 to Kirkwood Co., on account. May 16. Paid Kirkwood Co. the amount owed on the note of March 17. June 15. Borrowed $180,000 from Triple Creek Bank, issuing a 60-day, 9% note. July 21. Purchased tools by issuing a $102,000, 90-day note to Poulin Co., which discounted the note at the rate of 8%. Aug. 14. Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $180,000. (Journalize both the debit and credit to the notes payable account.) Oct. 13. Paid Triple Creek Bank the amount due on the note of August 14. Oct. 19. Paid Poulin Co. the amount due on the note of July 21. Dec. 1. Purchased office equipment from Greenwood Co. for $96,000,…
On the first day of the fiscal year, a company issues a $621,000, 11%, 10-year bond that pays semiannual interest of $34,155 ($621,000 × 11% × 1/2), receiving cash of $652,050. Required: Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. Chart Of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Notes Receivable 115 Interest Receivable 121 Merchandise Inventory 122 Supplies 131 Prepaid Insurance 140 Land 151 Building 152 Accumulated Depreciation-Building 153 Equipment 154 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 241 Notes Payable 242 Interest Payable 251 Bonds Payable 252 Discount on Bonds…
Current portion of long-term debt Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt consists of the following: December 31 December 31 Current Year Preceding Year Total long term-debt $784,700 $431,600 Current portion (227,600) (211,900) Long-term debt $557,100 $219,700 a. How much of the long-term debt was disclosed as a current liability on the current year's December 31 balance sheet? million b. How much did the total current liabilities change between the preceding year and the current year as a result of the current portion of long-term debt? million Increase c. If Connie's Bistro did not issue additional long-term debt next year, what would be the total long-term debt on December 31 of the upcoming year? million

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