Quick answer of this accounting questions During April, Horizon Technologies sold 450 wireless earbuds for $180 each. Each pair ofearbuds costs Horizon $75 to manufacture and comes with a two-year warranty. If 4% of theearbuds typically need to be replaced over the warranty period, and twelve were actuallyreplaced during April, for what amount in April should Horizon debit Product WarrantyExpense?a) $900b) $1,350c) $2,160d) $3,240

Step 1: Definition of Product Warranty ExpenseProduct Warranty Expense refers to the estimated cost…

Answered: During April, Horizon Technologies sold…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9MC: Blake Department Store sells television sets with one-year warranties that cover repair and...

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Excom sells radios, and each unit carries a two-year replacement warranty. The cost repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 100 radios for $50 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense? a. $50 b. $250 c. $30 d. $120 e. None of the above.
Excom sells radios and each unit carries a two-year replacement warranty. The cost of repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 157 radios for $53 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense? a.$26 b.$53 c.$416 d.$4,082
Keaton Inc. sells stability balls for $30/each. Each ball comes with a two year warranty. Keaton accrues warranty expense at a rate of 1.5% of sales dollars. Their cost to replace damaged and defective stability balls under warranty is $7 per ball. In June 2023, Keaton sold 1,000 stability balls. What is the dollar value of Keaton's June sales? How much should cooper record was Warranty Expense for June? Prepare the journal entry to record June's Warranty Expense. DR: CR: In the month of August, 2023, 25 balls were returned under the warranty. Prepare the journal entry to record the replacement of the returned balls. DR: CR:
During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is: Multiple Choice A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500. D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000. E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
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Concord Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale-2% of sales; second year after sale-4% of sales; and third year after sale-5% of sales. Sales and actual warranty expenditures for the first three years of business were: Sales Warranty Expenditures 2021 $750,000 $ 15,900 2022 1,010,000 46, 000 2023 1,017, 000 80,000 (a) Calculate the amount that Concord should report as warranty expense on its 2023 income statement and as a warranty liability on its December 31, 2023 SFP using the assurance - type warranty (expense - based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above. Warranty expense Warranty liability
On September 1, Year 1, Carolina Electronics Company has 1,150 streaming devices ready for sale. On October 1, 820 are sold at $120 each with a 1-year assurance-type warranty. Carolina estimates that the warranty cost on each streaming device sold will probably average $7 per unit. During the final 3 months of Year 1, Carolina incurred warranty costs of $3,450. Warranty costs in Year 2 were $2,290. Required: 1. Prepare the journal entries for the preceding transactions. 2. Show how the preceding items would be reported on the December 31, Year 1, balance sheet. 3. Prepare the journal entries for the preceding transactions using the modified cash basis method.
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
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 $14 and its retail selling price is $80. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $5,600 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $16,800 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $11,200 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an…
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 $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash.. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. December 9 December 16 December 29 December 31 Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. January 5 January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…
Grouper Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale-3% of sales; second year after sale-4% of sales; and third year after sale-5% of sales. Sales and actual warranty expenditures for the first three years of business were: Sales Warranty Expenditures 2021 $870,000 $17,100 2022 1,010,000 48,400 2023 1,041,000 80,000 (a) Calculate the amount that Grouper should report as warranty expense on its 2023 income statement and as a warranty liability on its December 31, 2023 SFP using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above. Warranty expense $ Warranty liability $
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…

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