Lynford Company sold 10,500 dishwashers for $1,100 each during 2021. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages $90 each. Actual warranty costs incurred during 2021 for units sold that year were $296,000. The statement of financial position at year end will report a related liability of: Select one: $649,000. $1,030,900. $945,000. $296,000.
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- Lynford Company sold 10,500 dishwashers for $1,100 each during 2021. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages $90 each. Actual warranty costs incurred during 2021 for units sold that year were $296,000. The
statement of financial position at year end will report a related liability of:
Select one:
- $649,000.
- $1,030,900.
- $945,000.
- $296,000.
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- Lynford Company sold 10,500 dishwashers for $1,100 each during 2021. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages $90 each. Actual warranty costs incurred during 2021 for units sold that year were $296,000. The statement of financial position at year end will report a related liability of: Select one: a. $296,000. O b. $649,000. O c. $1,030,900. O d. $945,000.EFG Corporation sold 10,500 dishwashers for P1,100 each during 2020. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages P90 each. Actual warranty costs incurred during 2020 for units sold that year were P296,000. The statement of financial position at year end will report a related liability of: Group of answer choices 945,000 649,000 1,030,900 296,000Casio Co. sells calculators that carry a one- year warranty against manufacturer's defects. Based on company experience, warranty costs are estimated at P 300 per calculator. During 2019, Casio sold 24,000 calculators and paid warranty costs of P 170,000. In its income statement for the year ended Dec. 31, 2019, how much should Casio report as warranty expense? * A.P 5,500,000 B.P 2,400,000 C.P 1,700,000 D.P 7,200,000
- Whit corporation sells washing machine that carry a three year warranty against manufacturer's defect. The company assures that the product will function as intended based on agreed -upon specification. Based on the industry experience, waarranty costs were estimated at P300 per machine. During 2022, Whit sold 24,000 washing machines and paid warranty coss of 1,700,000. In its profit or loss statement for the year ended December 31,2022. Whit should report warranty expense of?Perry Company sells 3,000 units of its product for $ 500 each in 2021. The selling price includes a one-year warranty on parts. It is expected that 2% of the units will be defective and that repair costs will average $50 per unit. In 2021, warranty contracts are honoured on 50 units for a total cost of $ 2,500. Perry Company's balance sheet reported blank as Estimated Warranty Liability on December 31, 2021.Dawson Company manufactures television components and sells them with a 6-month warranty under which defective components will be replaced without charge. On January 1, 2021, the warranty liability had a balance es P620,000. By June 30, 2021, the warranty liability on January 1, 2021 had been reduced to P120,400 by debits for estimated net cost of components returned that had been sold in 2020 The entity started out in 2021 expecting 7% of sales to be returned. However, due to the introduction of new models during the year, this estimated percentage of returns was increased to 10% on May 1. It is assumed that no components sold during a given month are returned in that month. Each component is stamped with a date at time of sale so that the warranty may be properly administered. The following table of percentages indicates the likely pattern of sales returns during the 6-month period of the warranty, starting with the month following the sale of components. Percentage of total returns…
- A company sold 8,000 units of its signature product for the calendar year ended December 31, 2020. Each unit is sold at P 45,000 including a one- year warranty on its parts. The company expects 3.50% of the products would be defective and that repair costs would costs them P 2,750.00 per unit. For 2020, 235 units were repaired for a total cost of P 640,375.00. Assuming that the Provision for Warranty account had a beginning balance at January 1, 2020 of P 297,730.00, determine the Provision for Warranty balance as of December 31, 2020.During 2021, JJJ Co. introduced a new line of machines that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows:Sales / Actual Warranty / Expenditures2021 / 600,000 / 9,0002022 / 1,500,000 / 65,0002023 / 2,100,000 / 135,000What amount should JJJ report as a liability at December 31, 2023?Flint Company sells products with a 2-year warranty. Past experience indicates that 2% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is estimated to be $85 per unit. During 2020, 8,450 units were sold at an average price of $400. During the year, repairs were made on 55 units at a cost of $3,600. Prepare journal entries to record the repairs made under warranty and estimated warranty expense for the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Warranty Expense (To record cost of honoring warranties) Warranty Expense Warranty Liability (To accrue estimated warranty costs) Debit 3600 Credit 3600
- 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 550,000Hall 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.$27,365Early in 2020,Crow Equipment sold 500 Rollomatics at $6,000 each. During 2020, Crow spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. Instructions a. Prepare 2020 entries for Crow. Assume that Crow estimates the total cost of servicing the warranties in the second year will be $35,000. b. Prepare 2020 entries for Crow assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $56,000 relates to sales of warranty contracts. Warranty costs incurred in 2020 were $20,000. Estimate revenues to be recognized on a straight-line basis.
