Chips Co. sells televisions at an average price of P 7,500 and also offers to each customer a separate 3-year warranty contract for P 750 that requires the company to perform periodic services and to replace defective parts. During 2021, the company sold 300 televisions and 270 warranty costs of P 200 for parts and P 400 for labor and accounts for warranties separately. Assume sales occurred on Dec. 31, 2021, income is recognized on the warranties, and straight line recognition of warranty revenues occcurs. What amount of current and non- current liability relative to warranty revenue would appear on the Dec. 31, 2021 statement of financial position, respectively?
Chips Co. sells televisions at an average price of P 7,500 and also offers to each customer a separate 3-year warranty contract for P 750 that requires the company to perform periodic services and to replace defective parts. During 2021, the company sold 300 televisions and 270 warranty costs of P 200 for parts and P 400 for labor and accounts for warranties separately. Assume sales occurred on Dec. 31, 2021, income is recognized on the warranties, and straight line recognition of warranty revenues occcurs. What amount of current and non- current liability relative to warranty revenue would appear on the Dec. 31, 2021 statement of financial position, respectively?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chips Co. sells televisions at an average price of P 7,500 and also offers to each customer a separate 3-year warranty contract for P 750 that requires the company to perform periodic services and to replace defective parts. During 2021, the company sold 300 televisions and 270 warranty costs of P 200 for parts and P 400 for labor and accounts for warranties separately. Assume sales occurred on Dec. 31, 2021, income is recognized on the warranties, and straight line recognition of warranty revenues occcurs. What amount of current and non- current liability relative to warranty revenue would appear on the Dec. 31, 2021 statement of financial position, respectively?
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