Helena, Inc. makes a boutique line of espresso machines that it sells with attached warranties. Write the journal entries for the following events: A. In 2015, Helena sold 700 espresso machines with attached warranties to restaurants on account for $1,500 each. B. Helena estimated that 50% of the machines would need repair during the life of the warranty at a cost of $90 per machine for parts and labour. In 2015, Helena did warranty repairs on 100 espresso machines. C. On December 31, 2015, Hot Stuff accrued the liability for future warranty work: D. If Helena had sold those 700 espresso machines to restaurants on account for $1,500 each, plus extended warranties for $100 each: E. Helena estimated that 50% of the machines would need repair during the life of the warranty at a cost of $90 per machine for parts and labour. In 2015, Pop-Up did warranty repairs on 100 espresso machines. F. During December 2015, employees at Hot Stuff earned wages of $70,000. Withholdings for these wages included $2,250 for the employees share of social security (FICA), $7,500 for federal income tax, $2,200 for state income tax, and $500 for union dues. The firm also incurred payroll tax expenses that included $2,250 for its share of FICA, $200 for federal unemployment tax (FUTA), and $700 for state unemployment tax (SUTA). Write the journal entry to record the firm's wage expense for December. G. Write the journal entry to record the firm's payroll tax expense for December. H. On December 15, 2015, Pop-Up borrowed $12,000 from the bank on a 7%, 4- month note. Write the following journal entries: To record the issuance of the note. I. To accrue interest on the note as of December 31, 2015. J. To record repayment of the note and interest on April 15, 2016.
Helena, Inc. makes a boutique line of espresso machines that it sells with attached warranties. Write the journal entries for the following events: A. In 2015, Helena sold 700 espresso machines with attached warranties to restaurants on account for $1,500 each. B. Helena estimated that 50% of the machines would need repair during the life of the warranty at a cost of $90 per machine for parts and labour. In 2015, Helena did warranty repairs on 100 espresso machines. C. On December 31, 2015, Hot Stuff accrued the liability for future warranty work: D. If Helena had sold those 700 espresso machines to restaurants on account for $1,500 each, plus extended warranties for $100 each: E. Helena estimated that 50% of the machines would need repair during the life of the warranty at a cost of $90 per machine for parts and labour. In 2015, Pop-Up did warranty repairs on 100 espresso machines. F. During December 2015, employees at Hot Stuff earned wages of $70,000. Withholdings for these wages included $2,250 for the employees share of social security (FICA), $7,500 for federal income tax, $2,200 for state income tax, and $500 for union dues. The firm also incurred payroll tax expenses that included $2,250 for its share of FICA, $200 for federal unemployment tax (FUTA), and $700 for state unemployment tax (SUTA). Write the journal entry to record the firm's wage expense for December. G. Write the journal entry to record the firm's payroll tax expense for December. H. On December 15, 2015, Pop-Up borrowed $12,000 from the bank on a 7%, 4- month note. Write the following journal entries: To record the issuance of the note. I. To accrue interest on the note as of December 31, 2015. J. To record repayment of the note and interest on April 15, 2016.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Helena, Inc. makes a boutique line of espresso machines that it sells with attached
warranties.
Write the journal entries for the following events:
A. In 2015, Helena sold 700 espresso machines with attached warranties to
restaurants on account for $1,500 each.
B. Helena estimated that 50% of the machines would need repair during the life of
the warranty at a cost of $90 per machine for parts and labour. In 2015, Helena did
warranty repairs on 100 espresso machines.
C. On December 31, 2015, Hot Stuff accrued the liability for future warranty work:
D. If Helena had sold those 700 espresso machines to restaurants on account for
$1,500 each, plus extended warranties for $100 each:
E. Helena estimated that 50% of the machines would need repair during the life of
the warranty at a cost of $90 per machine for parts and labour. In 2015, Pop-Up did
warranty repairs on 100 espresso machines.
F. During December 2015, employees at Hot Stuff earned wages of $70,000.
Withholdings for these wages included $2,250 for the employees share of social
security (FICA), $7,500 for federal income tax, $2,200 for state income tax, and
$500 for union dues. The firm also incurred payroll tax expenses that included
$2,250 for its share of FICA, $200 for federal unemployment tax (FUTA), and $700
for state unemployment tax (SUTA). Write the journal entry to record the firm's wage
expense for December.
G. Write the journal entry to record the firm's payroll tax expense for December.
H. On December 15, 2015, Pop-Up borrowed $12,000 from the bank on a 7%, 4-
month note. Write the following journal entries:
To record the issuance of the note.
I. To accrue interest on the note as of December 31, 2015.
J. To record repayment of the note and interest on April 15, 2016.
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