During its first year of operations Keene Limited had sales of $76,500. The company offers a 2- year limited warranty on all sales and expects that warranty costs for the first year will average 0.5% of sales with an additional 1.5% in the second year. During the current year the company spent $1,200 on warranty repairs. Which journal entry is correct to record the actual money spent on repairs

During its first year of operations Keene Limited had sales of $76,500. The company offers a 2- year limited warranty on all sales and expects that warranty costs for the first year will average 0.5% of sales with an additional 1.5% in the second year. During the current year the company spent $1,200 on warranty repairs. Which journal entry is correct to record the actual money spent on repairs

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
10) During its first year of operations Keene Limited had sales of $76,500. The company offers a 2- year limited warranty on all sales and expects that warranty costs for the first year will average 0.5% of sales with an additional 1.5% in the second year. During the current year the company spent $1,200 on waranty repairs. Required: 1. Prepare all joumal entries related to the warranty for the current year. 2. How will the warranty liability be reported on the company's year-end balance sheet?
White Hat Digital, Inc. starts the year with a credit balance of $3,500 in its Estimated Warranty Payable account. During the year, there were $224,000 in sales and $4,800 in warranty repair payments. White Hat Digital estimates warranty expense at 2% of sales. At the end of the year, what is the balance in the Estimated Warranty Payable account?
Hall Company sells merchandise with a one-year warranty. In the current year, sales consist of 2,105 units. It is estimated that warranty repairs will average $13 per unit sold and 30% of the repairs will be made in the current year and 70% in the next year. On the current year's income statement, Hall should show warranty expense of a.$8,210b.$19,156c.$0d.$27,365
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,987 units. It is estimated that warranty repairs will average $17 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of a.$35,545 b.$0 c.$50,779 d.$15,234
Haeir Co. sells washing machines that carry a three-year warranty against manufacturer's defects. Based on the entity's experience, warranty costs are estimated at P 300 per machine. During the current year, the entity sold 2,400 washing machines and paid warranty costs of P 170,000. What amount should be reported as warranty expense for the years? What amount should be reported as warranty liability at year-end? respectively * A.P 720,000 and P 170,000 B.P 170,000 and P 720,000 C.P 240,000 and P 550,000 D.P 720,000 and P 550,000
At the beginning of the year, Laurier Inc. had a balance in its warranty liability account of $ 50000. During the year Laurier Inc. paid warranty costs of $ 62000. At the end of the year, Laurier Inc. estimated that its future warranty liability was $ 60000. How much is Laurier Inc.'s warranty expense for the year? Your Answer:
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,392 units. It is estimated that warranty repairs will average $17 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of Oa. $40,664 Ob. so Oc. $28,465 Od. $12,199
PHAGE COMPANY estimates its annual warranty expense at 4% of net sales. The following balances are given by EUSTASS: Net sales – 1,500,000; warranty liability – balance 12/31/2021 debit (before adjustment) of 10,000; warranty liability - balance 12/31/2021 credit (after adjustment) of 50,000. Which of the following entries was made to record the 2021 estimated warranty expense? a. Warranty expense 60,000 10,000 Retained earnings Warranty liability 50,000 b. Warranty expense Retained earnings Warranty liability 50,000 10,000 60,000 c. Warranty expense Warranty liability 40,000 40,000 d. Warranty expense Warranty liability 60,000 60,000
During Year 1, its first year of operations, Benitez Co. reported sales of $360,000. At the end of Year 1, the company estimated its warranty obligation at 2% of sales. During Year 1, the company paid $4,800 cash to settle warranty claims. Which of the following statements is true? Multiple Choice Warranty expenses would decrease net earnings by $7,200 in Year 1. All of these answer choices are correct. The warranties payable account has a balance of $2,400 at the end of Year 1. Cash decreased by $4,800 as a result of the accounting events associated with warranties in Year 1.