Blake Department Store sells television sets with one-year warranties that cover repair and replacement of television parts. In the month of June, Blake sells forty television sets with a per unit cost of $500. If Blake estimates warranty fulfillment at 10% of sales, what would be the warranty liability reported in June? A. $1,000 B. $2,000
Q: June 11 a retailer sells a trimmer for $400 with a one-year warranty that covers parts. Warranty…
A: Warranty Warranty is assurance provided to a customer by a seller. It is provided against the…
Q: Review each of the transactions, and prepare any necessary journal entries for each situation.
A: Journal entry: It is a systematic record of a financial transaction of an organization recorded in…
Q: Hitzu Company sold a copler (that costs $7,500) for $15,000 cash with a two-year parts warranty to a…
A: Warranty expense is the cost associated with a defective product repair, replacement, or refund. In…
Q: Warranty Expense: A home improvement store sells lawnmowers and includes a warranty they will be…
A: The amount of warranty expense is recorded in the year of sale of products on the basis of an…
Q: Ecco Company sold $150,000 of kitchen appliances with six-month warranties during September. The…
A: Journal entry: It is a systematic record of a financial transaction of an organization recorded in…
Q: A company manufactures electronic equipment and offers a one-year warranty with each unit sold. For…
A: Hi student Since there are multiple sub-parts in this question, we will answer only first three…
Q: Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 6%…
A: The concept applied here is the accrual accounting principle.Accrual accounting recognizes expenses…
Q: A company sold 122 bikes at $180 each. The bikes carry a 3-year warranty for defects. The company…
A: The Warranty expenses are the estimated cost of the repairs, replacement and maintenance of the…
Q: Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It…
A: The official record for the business is a journal that includes every transaction in reverse…
Q: Hidden Hills Company manufactures and sells electronic games. Each game costs $50 to produce, sells…
A: Product Warranty expense = Sales x % of estimated warranty = (6500 games x $90) x 7% = $40,950
Q: White Hat Digital, Inc. starts the year with a credit balance of $3,500 in its Estimated Warranty…
A: The estimated warranty expenses are 2% of $224000. Opening warranty balance was $3500 and settlement…
Q: Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab…
A: Allocating the transaction price is to be done based on the standalone selling price of the…
Q: A company's sales for January are $250,000. If the company projects warranty obligations to be 5% of…
A: Formula used: Warranty liability = Sales x Warranty obligations percentage
Q: Ecco Company sold $155,000 of kitchen appliances with six-month warranties durin September. The cost…
A: Warranty expense is the expected cost to be incurred for the repair or replacement of goods that…
Q: A home gods retailer offers a sales incentive program where customers receive credit towards future…
A: Credit represents the liabilities of the company. If the credit is redeemed, it would decrease the…
Q: Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook…
A: 4. Estimated warranty liability balance on December 31 = Sales for the month of December x warranty…
Q: On September 1, Year 1, Carolina Electronics Company has 1,150 streaming devices ready for sale. On…
A: The objective of the question is to prepare the journal entries for the transactions of Carolina…
Q: On June 11 of the current year, a retailer sells a trimmer for $400 with a one-year warranty that…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Dynamo Corporation manufactures toasters. Each toaster comes with a 5-year assurance-type warranty.…
A: Journal entry is a primary entry that records the financial transactions initially.
Q: is warranty guar
A: 1&2) Indicated below whether each item is a separate performance obligation and allocate the…
Q: Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of…
A:
Q: Ecco Company sold $158,000 of kitchen appliances with six-month warranties during September. The…
A: The estimated warranty expense is $7,900 ($158,000*5%) and out of which $226 ($140 + $86) worth of…
Q: Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 4%…
A: Solution:- a)Preparation of the adjusting entry required at January 31, the end of the first month…
Q: Journalize the adjusting entry required at September 30, the end of the first month of the current…
A: A warranty obligation is created when sales is made. It remain on the BS till all of them are used…
Q: ! Required information Use the following information for the Exercises below. (Algo) [The following…
A: Warranty expenses refers to the estimated expense recorded by the business entity related to costs…
Q: Coronado Company sells automatic can openers under a 75-day warranty for defective merchandise.…
A: Golden Rules of Accounting : Account Type Debit Credit Personal Accounts the receiver the giver…
Q: Required information [The following information applies to the questions displayed below.] On…
A: An Estimated Warranty Liability Account details the approximate cost that an organization will incur…
Q: Aviation Systems sells its products with a three-year manufacturing warranty. The company's sales…
A: It is the cost that a business expects to or has already incurred for the repair or replacement of…
Q: atek Watch Company estimates that warranty costs will equal 2% of sales. In September, total sales…
A: Estimated warranty cost Total sales * 2% $400,000 * 2% $8000
Q: Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook…
A: Contingent liability refers to a potential obligation or liability that may arise in the future…
Q: Use the following information for the Exercises below. (Algo) [The following information applies to…
A: Warranty expenses:The expenses related to the assurance services provided to the customer Assurance/…
Q: What is the balance of the Estimated Warranty Liability account as of January 31?
A: The balance of the estimated warranty liability account will be calculated by drawing a ledger…
Q: you purchased 500 shares of WMT stock on November 15, 2020, for $150.54. You sold the 500 shares on…
A: Purchase WMT Stock @ $150.54 Sold Stock @ $143.60 Dividend Yield = 1.462% DIVIDEND YIELD = Dividend…
Q: Back in Time Inc. warrants its products for one year. The estimated product warranty is 2% of sales.…
A: Solution- Warranty liability at March 31 = 1250000*2% = 25000
Q: Blake Department Store sells television sets with one-year warranties that cover repair and…
A: The warranty liability account is made by the company to record the estimated expense related to…
Q: Hazel Gird's products come with a one-year warranty. In 2014, sales totaled 2,500 units. It is…
A: As per the accrual method of accounting, the expenditure which is related to a particular year…
Q: Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook…
A: Warranty: It implies a guarantee provided by the manufacturer in writing regarding the product sold…
Q: Wally Co. began selling merchandise on November 1, 2022. The company offers a 50-day warranty for…
A: A balance sheet is a financial statement that illustrates a company's assets, liabilities, and…
Q: Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of…
A: Introduction: An income statement is a critical financial record for every company. It illustrates…
Q: Excom sells radios and each unit carries a two-year replacement warranty. The cost of repair defects…
A: Sales = 110*$40 Sales = $4,400
Q: During August, Boxer Company sold $362,000 in merchandise that has a one-year warranty. Based on…
A: The warranty expense is recorded during the period of sales. This is done under the revenue…
Q: On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a…
A: Answer - Adjusting Entry for Warranty Expense - Warranty expense is the expense that a company…
Q: Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It…
A: ANSWER:- JOURNAL ENTRIES DATE…
Step by step
Solved in 2 steps
- Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $202,000 for January. On February 7, a customer received warranty repairs requiring $140 of parts and $105 of labor. Question Content Area a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. _______ _______ ______ Question Content Area b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. ___________ _______ _______During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty. December sales for this product total $127,000. The company expects 6% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $19. Record the related adjusting entry.EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all scooters. During the year, the company recorded net sales of $2,850 million. Historically, about 4% of all sales are returned under warranty and the cost of repairing and or replacing goods under warranty is about 30% of retail value. Assume that at the start of the year EZ Wheels’ balance sheet included an accrued warranty liability of $24.5 million and at the end of the year, the accrued warranty liability balance was $18.6 million. How much did EZ Wheels pay during the year to repair and/or replace scooters under warranty? Select one: a. None of these are correct. b. $40.1 million c. $34.2 million d. $114.0 million e. $18.6 million
- Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $400,000. Actual warranty expenditures in January of the following year were $13,000. Required: 1. Does this situation represent a contingent liability? 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. 4. What is the balance in the Warranty Liability account after the entries in Parts 2 and 3?Lachgar Industries warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring $140 of parts and $95 of labor. a. Journalize the adjusting entry required at June 30, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in July.Fitzpatrick Co. sold $391,000 of equipment during January under a one-year warranty. The cost to repair defects under the warranty is estimated at 3% of the sales price. On August 15, a customer required a $110 part replacement plus $55 of labor under the warranty. Required: Provide the journal entry for (a) the estimated warranty expense on January 31 for January sales on page 10 of the journal and (b) the August 15 warranty work on page 14 of the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
- On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $16 and its retail selling price is $80. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,800 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 12 razors that were returned under the warranty. December 16 Sold 180 razors for $14,400 cash. December 29 Replaced 24 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 120 razors for $9,600 cash. January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $600,000. Actual warranty expenditures in January of the following year were $13,000.Required:1. Does this situation represent a contingent liability? Why or why not?2. Record warranty expense and warranty liability for the month of December based on 6% of sales.3. Record the payment of the actual warranty expenditures of $13,000 in January of the following year. 4. What is the balance in the Warranty Liability account after the entries in requirements 2 and 3?Catskills guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 7% of sales. Assume that the Catskills dealer in Colorado Springs made sales totaling $450,000 during 2018. The company received cash for 10% of the sales and notes receivable for the remainder. Warranty payments totaled$12,000 during 2018. Requirements: 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. 2. Assume the Estimated Warranty Payable is $0 on January 1, 20182018. Post the 2018transactions to the Estimated Warranty Payable T-account. At the end of 2018,how much in Estimated Warranty Payable does the company owe?
- Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It offers a one-year warranty on all services. Review each of the transactions: A. March 31: Emperor provides cleaning services for 25 pools during the month of March at a sales price per pool of $610 cash. Emperor records warranty estimates when sales are recognized and bases warranty estimates on 1 percent of sales. B. April 5: A customer files a warranty claim that Emperor honors in the amount of $130 cash. C. April 13: Another customer, J. Jones, files a warranty claim that Emperor does not honor due to customer negligence. D. June 8: J. Jones files a lawsuit requesting damages related to the dishonored warranty in the amount of $2,100. Emperor determines that the lawsuit is likely to end in the plaintiff's favor and the $2,100 is a reasonable estimate for damages. Prepare any necessary journal entries for each situation. If an amount box does not require an entry, leave it blank. If no…Back in Time Inc. warrants its products for one year. The estimated product warranty is 6.5% of sales. Assume that sales were $810,500 for March. In April, a customer received warranty repairs requiring $44,780 of parts. a. Determine the warranty liability at March 31, the end of the first month of the current fiscal year. Round your answer to the nearest dollar.Warranty Liability: (same info as previously described) A home improvement store sells lawnmowers and includes a warranty they will be free of defects for 1 year. The store estimates $2 per lawnmower sold will result in warranty covered defects. The company sells 1000 lawnmowers during the accounting period. The company also replaces $600 worth of lawnmowers due to ACTUAL warranty issues with customers during the accounting period. What is the Warranty Reserve balance (liability) based on All the information above for the accounting period. You can assume the beginning balance of the liability account was $0. O $600 O Not enough info O $2,000 O $1,400