Accrued Product WarrantyLachgar Industries disclosed estimated product warranty payable for comparative years as follows:(in millions)Current estimated product warranty payableNoncurrent estimated product warranty payableYear 2$16,2119,860$26,071Year 1$15,5428,690$24,232TotalPresume that Lachgar's sales were $211,240 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $16,712million.a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cashon the business relative to the quick current assets and other longer-termb. 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?

There are two types of warranty a customer can take from market.Service Type Warranty - It can be…

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 Year 1 $16,211 $15,542 9,860 8,690 $26,071 $24,232 2. Assume that the total paid on warranty claims during Year 2 was $16,712 Total Presume that Lachgar's sales were $211,240 million in 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?

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 Year 1 $16,211 $15,542 9,860 8,690 $26,071 $24,232 2. Assume that the total paid on warranty claims during Year 2 was $16,712 Total Presume that Lachgar's sales were $211,240 million in 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?

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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