amount of provision on product warranty
Q: Kristine is distributor of brass picture frames for P45. For 2022, she plans to purchase for P30…
A: Data given:: Selling price per unit = P 45 Purchase price per unit…
Q: distributor of brass picture frames for P45. For 2022, she plans to purchase for P30 each and sell…
A: Given information : Purchase price 30 Selling price 45 Expected fixed costs 240000 Variable…
Q: Regasco Gas Co. grants its customers one reward point per P100 sales. Each point is equivalent to…
A: The company may provide gift and reward while making sales to the customers and the customers then…
Q: Lex Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Cute Company…
A: % of boxtops that will be redeemed = 60% on sales of 675,000 boxtops = 6,75,000×60% = 405000 boxes
Q: General Motors of Canada Limited guarantees automobiles against defects for five years or 160,000…
A: Journal entry : Method of recording financial transactions in the book of original entry by debiting…
Q: During 2020, STU Company sold 500,000 boxes of brownies mix under a new sales promotional program.…
A: Net premium expense = Cost of baking pan + Handling and Shipping - Remittance from customer = 50 + 5…
Q: Question ：The accountant who posted the sale is now worried that they treated this incorrectly. They…
A:
Q: During 2024, Foxfire Company introduced a new line of machines that carry a three-year warranty…
A: Warranty is a form of assurance being given by seller to the buyer that in case there is any defect…
Q: Sandhill Company sells goods to Blossom Company during 2025. It offers Blossom the following rebates…
A: Working : Revenue to be recognized = Gross sales price - rebate
Q: Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of…
A: Deferred revenue for which amount has been received, but these will be earned later on.Gift card…
Q: Kristine is distributor of brass picture frames for P45. For 2022, she plans to purchase for P30…
A: Operating income is the profits of an entity that are earned from its main operations like sales of…
Q: Crane Bakery began selling gift cards in 2025. Based on industry norms, they expect that 30% of the…
A: Deferred revenue for which amount has been received, but these will be earned later on.Gift card…
Q: The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its…
A: Step 1 The warranty expense is $5,000,000. It is obtained by adding the product of the number of…
Q: Moonlight Industries just signed a sales contract with a new customer. JK will receive annual…
A: A sales contract seems to be a contract between a buyer and a seller that covers the sale as well as…
Q: USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles,…
A: Note: A journal entry is a form of accounting entry that is used to report a business transaction in…
Q: Thorne Estates Limited advertises and sells residential property on behalf of its customers. The…
A: A Cash Budget depicts the cash receipts and cash payments for the period. It helps the company to…
Q: Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of…
A: Gift card purchases are recorded as deferred revenue and subsequently recognized as revenue as the…
Q: Ivanhoe Company sells goods to Pharoah Company during 2025. It offers Pharoah the following rebates…
A: Revenue refers to the amount that is being earned from selling goods or services to customers that…
Q: Pirates PLC sells a line of goods under a six-month warranty. Any defect arising during that period…
A: The question is based on the concept of Financial Accounting.
Q: Crane Inc. sells prepaid telephone cards to customers in its convenience stores. When Crane sells…
A: Income earned by Crane inc. is the amount of commission received on sale of prepaid telephone cards…
Q: On January 1, 2021, Lumberjack Co. needed to purchase a new log jammer; however, due to cash flow…
A: Lumberjack Co. purchased machine on credit on January 1, 2021 for $12,000 and start the payments at…
Q: Wildhorse Company sells goods to Sheffield Company during 2023. It offers Sheffield the following…
A: The journal entry is very important in accounting because it is the first instance where the…
Q: 2. During 2020, Joaquin Company introduced a new line of machines that carry a two-year warranty…
A: Year 2020 Estimated warranty expenses and liability= Year of sale= P1000000*1%= P10000 Year after…
Q: Indicate how much income Ayayai should recognize in January, February, March, and April.
A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…
Q: During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program.…
A: Requirement 1: The calculation of premium expenses is as follows: The resultant table is as…
Q: Deutsche Transport can lease a truck for four years at a cost of €38,000 annually. It can instead…
A: Present value annuity factor is computed as follows:-PVAF = wherePVAF = Present value annuity…
Q: During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each…
A: Premium (Gift) means the product given free of cost to the customer on fulfilling the certain…
Q: A rental car agency rents cars for an average price of $45/day. The number of cars owned in 2020…
A: Present Worth (PW)- It is the difference between the present value of cash inflows and the present…
Q: How much is the Unearned Revenue for Unredeemed Premiums at December 31, 2021? 2. How much is the…
A: Sales revenue: Sales revenue is the income earned by the company by selling goods and services.…
Q: Pasti Berhad values, advertises and sells residential property on behalf of its customers. The…
A: Cash budget refers to an estimation of cash inflows and outflows in a business over a specified…
Q: Gen sells cellular phones. Each phone sells for P10,000 and carries a warranty against defects of…
A: Expected number of phones which come for repairs under warranty = 60,000 x10% = 6,000 phones
Q: 10.Pirates PLC sells a line of goods under a six-month warranty. Any defect arising during that…
A: Provision is reserve which helps to cover the loss if an expected loss happen in future. The…
Q: Beginning the year 2020, the ABC Company began marketing its phone. Each phone sells for P50,000. To…
A: As per IFRS 15 -Revenue from contracts with customers the unearned revenue to be recognized by the…
4. A business sells 5,000 appliances at P8,000 each, which carry a one-year repair warranty. If minor repairs were to be required to appliances sold in 2022, the repair cost would be P600 each. If major repairs were needed on all goods sold, the cost would be P1,500 each. It is estimated that 40% of goods sold in 2022 will have no defects, 45% will have minor defects, and 15% will have major defects. What amount of provision on product warranty should the company recognize for 2022?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Lastly, can you show me how to do this one? 22. In 2018, XYZ, Inc. sold 2,000 beds for $50 each. The beds carry a 2-year warranty for repairs. XYZ estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the beds during 2018? Assets = Liabilities + Stockholders’ Equity Revenues – Expenses = Net IncomeCrane Bakery began selling gift cards in 2025. Based on industry norms, they expect that 30% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $2000. During that period, gift cards with a value of $500 were redeemed. The amount of revenue that Crane will recognize in 2025 with regard to the gift cards is O $650 O $500 O $2000 O $714Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $1000. During that period, gift cards with a value of $250 were redeemed. The amount of revenue that Cullumber will recognize in 2025 with regard to the gift cards is
- 1. General Motors guarantees automobiles against defects for five years or 160,000 km, whichever comes first. Suppose GM can expect warranty costs during the five-year period to add up to 4% of sales. Assume that Forbes Motors made sales of $2,500,000 on their Buick line during 2020. Forbes received cash for 13% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totalled $75,000 during 2020. Post to the Estimated Warranty Payable T-account. The beginning balance was $43,000. At the end of 2020, how much in estimated warranty payable does Forbes owe its customers?Wildhorse Company sells goods to Sheffield Company during 2023. It offers Sheffield the following rebates based on total sales to Sheffield. If total sales to Sheffield are 11,000 units, it will grant a rebate of 2%. If it sells up to 21,200 units, it will grant a rebate of 4%. It if sells up to 28,000 units, it will grant a rebate of 6%. In the first quarter of the year, Wildhorse sells 11,600 units to Sheffield, on account, at a sales price of $116,000. Based on past experience, Wildhorse has sold over 40,000 units to Sheffield, and these sales normally take place in the third quarter of the year. (a) Your answer is partially correct. Prepare the journal entries including any rebates that Wildhorse should make to record the sale, on account, of the 11,600 units in the first quarter of the year assuming Wildhorse follows IFRS. Ignore any cost of goods sold entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is…10.Pirates PLC sells a line of goods under a six-month warranty. Any defect arising during that period is repaired free of charge. Pirates PLC has calculated that if all the goods sold in the last six months of the year required repairs the cost would be $2 million. If all of these goods had more serious faults and had to be replaced the cost would be $6 millionThe normal pattern is that 80% of goods sold will be fault-free, 15% will require repairs and 5% will have to be replaced. What is the amount of the provision required? Select one alternative: O $1.6 million O $6 million O $2 million O $0.6 million
- 3. What is the contract revenue for 2021? 4. What is the contract revenue for 2022?AshvinSandhill Company sells goods to Blossom Company during 2025. It offers Blossom the following rebates based on total sales to Blossom. If total sales to Blossom are 9,300 units, it will grant a rebate of 2%. If it sells up to 20,600 units, it will grant a rebate of 4%. If it sells up to 28,000 units, it will grant a rebate of 6%. In the first quarter of the year, Sandhill sells 10,100 units to Blossom at a sales price of $90,900. Sandhill, based on past experience, has sold over 39,000 units to Blossom, and these sales normally take place in the third quarter of the year. What amount of revenue should Sandhill report for the sale of the 10,100 units in the first quarter of the year? Revenue $
- During 2024, Foxfire Company introduced a new line of machines that carry a three-year warranty against defects. Based on experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales were P1,200,000, P3,000,000 and P4,200,000 for 2024, 2025, and 2026, respectively. Actual warranty expenditures were P18,000, P90,000 and P270,000 for 2024, 2025 and 2026, respectively. What amount should be reported as warranty liability on December 31, 2026?General Motors of Canada Limited guarantees automobiles against defects for five years or 160,000 km, whichever comes first. Suppose GM Canada can expect warranty costs during the five-year period to add up to 3% of sales. Assume that Forbes Motors in Waterloo, Ontario, made sales of $2,000,000 on their Buick line during 2020. Forbes received cash for 10% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totalled $50,000 during 2020. Record the sales, warranty expense, and warranty payments for Forbes. Ignore any reimbursement that Forbes may receive from GM Canada. Post to the Estimated Warranty Payable T-account. The beginning balance was $40,000. At the end of 2020, how much in estimated warranty payable does Forbes owe its customers?During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
