Quiz: Accounting for Current Liabi... GSavedHelpSave & ExitSubmitCheck my workRequired informationCost of warranty program is probable30s0:00 / 2:06XL目Knowledge Check 01Maas, Incorporated, sells washers and dryers that include a maximum one-year warranty covering parts. Past experience showsthat warranty expense averages about 2 percent of the selling price of each washer and dryer. Net sales totaled $400,000during the year ending December 31.Prepare the December 31 adjusting entry for Maas by selecting the account names from the drop-down menus and enteringthe dollar amounts in the debit or credit columns.View transaction listJournal entry worksheet< Prev15of 19Next >IIF3F4F5F7F8F10F12FinderLLDeX114&3 PSavedHelpSave aiz: Accounting for Current Liab...iRequired information1.Maas, Inc., sells washers and dryers that include a maximum one-year warranty coveringparts. Past experience shows that warranty expense averages about 2 percent of theselling price of each washer and dryer. Net sales totaled $400,000 during the year endingDecember 31.Note: Enter debits before credits.DateGeneral JournalDebitCreditDec. 31Record entryClear entryView general journal< Prev15of 19Next >............IIF4F5F8F12OLLL#3%246.

Total estimated warranty liability = 2% * Net sales Total estimated warranty liability = 2% *…

Maas, Incorporated, sells washers and dryers that include a maximum one-year warranty covering parts. Past experience shows that warranty expense averages about 2 percent of the selling price of each washer and dryer. Net sales totaled $400,000 during the year ending December 31. Prepare the December 31 adjusting entry for Maas by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Maas, Incorporated, sells washers and dryers that include a maximum one-year warranty covering parts. Past experience shows that warranty expense averages about 2 percent of the selling price of each washer and dryer. Net sales totaled $400,000 during the year ending December 31. Prepare the December 31 adjusting entry for Maas by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

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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During August, Boxer Company sold $362,000 in merchandise that has a one-year warranty. Based on past experience, warranty expenses are estimated to be about 5% of total sales revenue. Boxer used $8,800 in parts for warranty repairs on merchandise that customers returned. Which of the following statements is correct about the estimated warranty expense for the month? O No recording is needed because the warranty expense is estimated. Boxer's estimated warranty Expense increased by $18,100 this month. O Boxer's estimated warranty liabilities had no change this month. O Boxer's estimated warranty expense decreased by $8,800 this month.
During December, Far West Services makes a $3,600 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. (Note: the sales tax amount is in addition to the credit sale amount.) Record sales and sales tax payable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It offers a one-year warranty on all services. Review each of the transactions: A. March 31: Emperor provides cleaning services for 25 pools during the month of March at a sales price per pool of $610 cash. Emperor records warranty estimates when sales are recognized and bases warranty estimates on 1 percent of sales. B. April 5: A customer files a warranty claim that Emperor honors in the amount of $130 cash. C. April 13: Another customer, J. Jones, files a warranty claim that Emperor does not honor due to customer negligence. D. June 8: J. Jones files a lawsuit requesting damages related to the dishonored warranty in the amount of $2,100. Emperor determines that the lawsuit is likely to end in the plaintiff's favor and the $2,100 is a reasonable estimate for damages. Prepare any necessary journal entries for each situation. If an amount box does not require an entry, leave it blank. If no…
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