Accrued Product WarrantyLachgar Industries disclosed estimated product warranty payable for comparative years as follows:(in millions)Current estimated product warranty payableNoncurrent estimated product warranty payableTotalYear 2Feedback$14,9039,065$23,968XPresume that Lachgar's sales were $194,201 million in Year 2 and that the total paid on warranty claims during Year 2 was $15,364 million.▼ Check My WorkReview the need for a classified balance sheet.Year 1a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demandsbusiness relative to the quick current assets and other longer-term demands$14,2897,989$22,278b. Provide the journal entry for the Year 2 product warranty expense. If an amount box does not require an entry, leave it blank.Product Warranty ExpenseProduct Warranty PayableXon the

The contrast between short-term and long-term liabilities is significant because it sheds light on…

Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: (in millions) Current estimated product warranty payable Noncurrent estimated product warranty payable Total Year 2 $14,903 9,065 Year 1 $14,289 7,989 $23,968 $22,278

Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: (in millions) Current estimated product warranty payable Noncurrent estimated product warranty payable Total Year 2 $14,903 9,065 Year 1 $14,289 7,989 $23,968 $22,278

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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Question

Accrued Product Warranty
Lachgar Industries disclosed estimated product warranty payable for comparative years as follows:
(in millions)
Current estimated product warranty payable
Noncurrent estimated product warranty payable
Total
Year 2
Feedback
$14,903
9,065
$23,968
X
Presume that Lachgar's sales were $194,201 million in Year 2 and that the total paid on warranty claims during Year 2 was $15,364 million.
▼ Check My Work
Review the need for a classified balance sheet.
Year 1
a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands
business relative to the quick current assets and other longer-term demands
$14,289
7,989
$22,278
b. Provide the journal entry for the Year 2 product warranty expense. If an amount box does not require an entry, leave it blank.
Product Warranty Expense
Product Warranty Payable
X
on the

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