Coronado Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Coronado estimates that 3% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $25. The units sold and units defective that occurred during the last 2 months of 2022 are as follows. Month November December (a) Units Sold 31,600 33,600 Units Defective Prior to December 31 632 Account Titles and Explanation 420 Prepare the journal entry to record the costs incurred in honoring 1,052 warranty claims. (Assume actual costs of $26,300.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit

Coronado Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Coronado estimates that 3% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $25. The units sold and units defective that occurred during the last 2 months of 2022 are as follows. Month November December (a) Units Sold 31,600 33,600 Units Defective Prior to December 31 632 Account Titles and Explanation 420 Prepare the journal entry to record the costs incurred in honoring 1,052 warranty claims. (Assume actual costs of $26,300.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit

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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A company sells goods with a warranty for the cost of repairs required in the first 1 month after purchase. Past experience of suggests: stion i) 85% of the goods sold will have no defects ii) 8% will have minor defects iii)7% will have major defects If minor defects were detected in all products sold, the cost of repairs will be OMR 66,000; if major defects were detected in all products sold, the cost would be OMR 272,000. What amount of provision should be made? OMR 50,700 OMR 24,320 OMR 26,380 个 None of them
Intel Corporation reported the following in its 2016 financial statements (in millions): December 31, 2016 2015 Total assets $113,327 $101,459 Revenues 59,387 55,355 Research and development expenses 12,740 12,128 Net income 10,316 11,420 What is the common-size amount for Intel Corporation’s research and development expense for 2016? A. 17.4% B. 21.5% C. 11.2% D. 78.5% E. None of the above
Acme Ltd. manufactures point of sale terminals used by businesses to process transactions. At the close of business on 30 September, the company had 450 terminals in inventory. The company's policy is to maintain an ending inventory of terminals equal to 30 per cent of next month's sales. Each terminal manufactured requires 25 minutes of assembly and inspecting time at a cost of 70 cents per minute. The company expects the following sales activity: October 8 000 units November 12 000 units December 13 000 units January 10 000 units What is the total projected direct labour cost for November and December? O $302 000 O None of the other alternatives $210 000 O $427 000
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.
Q3- On December 1, Aramex Company introduces a new product that includes a one-year warranty on parts. In December, 500 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $60 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.
outback Co. was organized to sell a single product that carries a 45 day warranty against defects. Engineering estimates indicates that 12% of the units sold will prove defective and require an average repair cost of $20 per unti. During outbacks first month of operations, total sales were 200 untis; by the end of the month, nine defective units had been repaired. The Liability for product warrantees at month end should be. a.$180 b.$660 c.$300 d.$480
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?
Flint Taco Palace sells 280 gift cards at $50 per gift card and 140 of the gift cards are redeemed by year-end. Flint estimates that it wi have 10% breakage on its gift cards. Prepare the entry for the gift card redemption and the expected breakage for the gift cards in the current year. (Ignore Cost of Goods Sold.) (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries. Round intermediate calculations to 4 decimal places, eg. 0.2456 and final answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Cash Unearned Gift Card Revenue Subscriptions Revenue. Debit 14000 Credit 7000 7000
Walton Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet Walton expects sales in January year 1 to total $260,000 and to Increase 15 percent per month in February and March All sales are on account. Walton expects to collect 67 percen of accounts receivable in the month of sale, 21 percent in the month following the sale, and 12 percent in the second month following the sole Required a. Prepare a sales budget for the first quarter of year 1 b. Determine the amount of sales revenue Walton will report on the year 1 first quarterly pro forma Income statement. c. Prepare a cash receipts schedule for the first quarter of year 1 d. Determine the amount of accounts receivable as of March 31, your 1 Complete this question by entering your answers In Use tabs below. Required A Required B Required C Required D Prepare a cash receipts schedule for the first quarter of year (out road…
4. Bonita.com sells 6800 units of its product for $460 each. The selling price includes a one- year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $40 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $4800. What amount should Bonita.com accrue on December 31 for estimated warranty costs? Select answer from the options below a. $8160 b. $32640 c. $ 4800 d. $3360
5 Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,200 list price. Bally dated the invoice July 31 with 10 EOM terms. Intel receives a 40% trade discount. Intel pays the invoice on August 13. On August 09, Intel Corporation returns $900 of the machinery due to defects. What does Intel pay Bally on August 13? Payable amount to Bally
The following sales and purchases are expected over the Four-month period from December to March Purchases Sales December OMR 30000 OMR 26000 January OMR 25000 OMR 30000 February OMR 24000 OMR 24000 March OMR 26000 OMR 28000 Additional Information: 1. Wages are paid each month of OMR 2000, which are paid in month that they are incurred 2. 30% of the Sales are on credit - and we allow one-month credit period - and 70% of the sales for immediate settlement 3. 40% of the Purchases are on credit - and 1 month credit period - and 60% of the purchases are for immediate settlement 4. The balance of cash as at 1 January was OMR 9000 If the company is preparing a budget from January to March, what will be the Closing balance of cash on March ? Select one: a. OMR 7800 b. OMR 7200 c. OMR 5800