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
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
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Boost inc sells vitamin supplements to customers with an unconditional sales return if they are not satisfied. The sales return extends 90 days. On May 12, 2023, High Country Integrated health purchases $4,000 of products with a cost of $2,000. Based on the company's prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes a
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