Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 AI Jabel sold 15,000 warranty contract at $99 each. Al
Q: ly at a total price of P7,000 per unit. The company also incurred actual repair costs of P3,500,000…
A: Warranty means the undertaking given by the company selling the goods that in case of any defect ,…
Q: Vera., a dealer of household appliances, sells washing machines at an average price of P8,100. The…
A: Warranty Liability: The expected cost of repair and maintenance of the sold items should be recorded…
Q: Skysong Factory provides a 2-year warranty with one of its products which was first sold in 2025.…
A: The business entities enter the commercial transactions into the journal to keep track of them. To…
Q: Pesto Company started its business in selling printers with three-year warranty. It estimates its…
A: Warranty means the undertaking given by the company selling the goods that in case of any defect ,…
Q: the retailer allows its customers to purchase an extended warranty for an additional 2 years for…
A: Extended warranty is warranty which extend normal warranty period as offered by manufacturer.…
Q: .Show all entries are required concerning warranties for 2020 and the computations that justify the…
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: Warranty 40 provides extended service contracts on electronic equipment sold through major…
A: Accounting principles are those rules, regulations and guidelines which are used by all the…
Q: Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During…
A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…
Q: Socorro Company sells color television sets with a two-year repair warranty. The sale price for each…
A: Under the "expense as incurred" approach, the warranty costs are recognized as an expense only when…
Q: ABC Company started its business in 2019. It sells an equipment with a 3- year warranty. ABC…
A: Warranty expense can be define as an expense for a company which is offered by the company to their…
Q: Carla Corporation sells DVD players. The corporation also offers its customers a 4-year warranty…
A: Warranty revenue recognized = Unearned warranty revenue / Contract term
Q: Happy Trails guarantees its snowmobiles for three years. Company experience indicates that warranty…
A: Journal Entries - Journal Entries are used to record transactions entered into by the company. It is…
Q: Best Appliance Store offers a two-year warranty on all appliances sold. The company estimates that…
A: Formula: Sales revenue = Sales price per unit x Sales units.
Q: ABC Company started its business in 2019. It sells an equipment with a 3- year warranty. ABC…
A: Warranty Liability as on December 31,2020 = Total Warranty Expense till 2020 - Actual Warranty…
Q: Erafone provides a 2-year warranty with one of its products which was first sold in 2020. Erafone…
A: Warranty is a present obligation that arises from past events and their settlement has required an…
Q: ABC Corporation started its business in 2019. It sells printers with a 3-year warranty. ABC…
A: Given information, Sales in 2019 =7,500 units Selling price =P 5,000 Warranty cost per percentage =…
Q: LP Corporations sells smart televisions. The corporation also offers its customers a 2 year warranty…
A: Warranty contract includes the promise in a contract from one party to another that the facts and…
Q: Leppard Corporation sells DVD players. The corporation also offers its customers a 4-year warranty…
A: Definition: Contingencies: A business situation that occurs due to uncertain business conditions…
Q: ABC Corporation started its business in 2019. It sells printers with a 3-year warranty. ABC…
A: The balance sheet or the statement of financial position shows the financial position of the company…
Q: Best Appliance Store offers a two-year warranty on all appliances sold. The company estimates that…
A: Formula: Sales revenue = Sales units x Sales price per unit
Q: Moon Ltd. sells custom made furniture on 24 months' interest free terms to qualifyin On 30 June…
A: According to the time value of money theory, money that is available now is worth more than the same…
Q: On September 1, 2019, Carolina Electronics Company has 1,160 Blu-ray players ready for sale. On…
A: Warranty cost is an form of expense related to a defective product repair , faulty goods,…
Q: Sunnyvale Computer Company sells a line of computers that carry a six-month warranty. Customers are…
A: Warranty is the promise made to the buyer of the product by the seller to repair or replace the…
Q: What is the unadjusted warranty expense for 2022? What is the unadjusted warranty liability for…
A: As per our protocol we are supposed to answer first 3 sub-parts only. To get the solution of another…
Q: C Inc. sells medical equipment. ABC provides its customers an option to purchase a three-year…
A: On the basis of period of repayment liabilities are classified as current and non current. Any…
Q: Streep Factory provides a 2-year warranty with one of its products which was first sold in 2020.…
A: Entry to record the sales.
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- On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (c) The recognition of warranties revenue
- Leppard Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Leppard sold 20,000 warranty contracts at $99 each. The corporation spent $180,000 servicing warranties during 2020. Prepare Leppard’s journal entries for (a) the sale of contracts, (b) the cost of servicing the warranties, and (c) the recognition of warranty revenue. Assume the service costs are inventory costs.Feller, Inc. sells a certain machine for $40,000. Included in this price is an implied service-type warranty of $1,000. Fifty machines were sold in 2020. Warranty claims incurred during 2020 amounted to $21,000. Required: Determine the amount of sales that Feller, Inc. should record for 2020.On December 31, 2019, Entity A enters into a contract with Customer B to transfer a license for a fixed fee of P100,000 payable as follows: • 20% is payable upon signing of contract. • 80% is represented by a note receivable collectible in 4 equal annual installments starting December 31, 2020. The appropriate discount rate is 12% (Use PV factor = 3.0375) The license provides Customer B the right to use Entity A's patented processes. Customer B continues to operate using its trade name and has the discretion of developing a new product name for the products it will produce using the patented processes. The license does not explicitly require Entity A to undertake activities that will significantly affect the intellectual property to which Customer C has rights. Neither does Customer B expect that Entity A will undertake such activities. Entity A grants the license to Customer B on December 31, 2019. How much revenue from the franchise contract will Entity A recognize in 2019?
- In 2020, Pluto Company started selling new computer that carried a 2-year warranty against defects. Based on the manufacturer's recommendations, the entity estimated warranty cost as a percentage of sales.First year of warranty - 3%Second year of warranty - 9% 2020 2021 Sales 5,000,000 7,000,000 Actual warranty repairs 100,000 250,000 Prepare the necessary journal entries to record this transaction, using the expense as incurred approach, for the years 2020 and 2021.as show in the picErafone provides a 2-year warranty with one of its products which was first sold in 2020. Erafone sold $1,000,000 of products subject to the warranty. Era Phone expects $125,000 of warranty costs over the next 2 years. In 2020, Erafone spent $70,000 servicing warranty claims. Prepare journal entries in 2020 to record the costs incurred in honoring the warranties (assume expenditures are for repair part costs):
- SorCo. Inc. has just entered into a sale agreement with a customer. The contract is for $600,000. However, the payments will be made as follows: 1 August 20X1 on date of delivery $400,000; 1 August 20X2 $100,000 and 1 August 20X3 $100,000. SorCo has estimated that the interest rate required for this customer is 8%. SorCo follows IFRS. Required: Prepare the journal entry required to record the sale on 1 August 20X1 and the receipt of cash on 1 August 20X2 and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to the nearest whole dollar.)Carla Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Carla sold 20,000 warranty contracts at $132 each. The corporation spent $173,000 servicing warranties during 2020, and it estimates that an additional $865,000 will be spent in the future to service the warranties. Prepare Carla’s journal entry for the sale of contracts. Assume the service costs are inventory costs Prepare Carla’s journal entry for the cost of servicing the warranties. Assume the service costs are inventory costs Prepare Carla’s journal entry for the recognition of warranty revenue. Assume the service costs are inventory costs.ABC Inc. sells medical equipment. ABC provides its customers anoption to purchase a three-year warranty. Warranty contracts sold on 2021, 2022 and2023 are P720,000, 864,000 and 1,004,000, respectively. Management expects that:20% of warranty costs are done in the 1st year from the date of sale.30% of warranty costs are done in the 2nd year from the date of sale.50% of warranty costs are done in the 3rd year from the date of sale.Actual costs incurred on repairs are P25,000, 100,000 and 200,000, respectively.What amount should be reported as liability on warranties on December 31, 2021, 2022and 2023?