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Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit

Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit

FINANCIAL ACCOUNTING
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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Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit
Transcribed Image Text:Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit
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