At what amount should warranty expense and premium expense be shown in theDecember 31, 2019 profit or loss statement of Jackson Music Emporium?a. P108,00 and P56,950, respectivelyb. P108,00 and P75,600, respectivelyc. P136,00 and P204,000, respectivelyd. P164,00 and P120,400, respectivelyAt what amount should the estimated liability from warranties be shown in theDecember 31, 2019 statement of financial position of Jackson Music Emporium? a.P80,000b. P108,000c. P136,000d. P164,000At what amount should the inventory of premium cassette players be shown in theDecember 31, 2019 financial statements of Jackson Music Emporium? a. P39,950b. P56,950c. P204,000d. P221,000At what amount should the estimated premium claims outstanding be shown in theDecember 31, 2019 financial statements of Jackson Music Emporium? a. P36,400b. P44,000c. P75,660d. P84,000 Jackson Music Emporium Carries a wide variety of musical instruments, sound reproductionequipment, recorded music, and sheet music. Jackson uses two sales promotion techniquesnamely (a) warranties and (b) premiums to attract customers.Musical instruments and sound equipment are sold with a one-year warranty forreplacement of parts and labor. The estimated warranty cost, based on past experience, is2% of sales.The premium is offered on the recorded and sheet music. Customers receive a coupon foreach peso spent on recorded music or sheet music. Customers may exchange 20 couponsand P20 for a cassette player. Jackson pays P34 for each cassette player and estimates that60% of the coupons given to the customers will be redeemed.Jackson's total sales for 2019 were P7,200,000; P5,400,000 from musical instrumentand sound reproduction equipment and P1,800,000 from recorded music and sheetmusic. Replacement parts and labor for warranty work totaled P164,000 during 2019. Atotal of 6,500 cassette players used in the premium program were purchased during theyear and there were 1,200,000 coupons redeemed in 2019.The accrual method is used by Jackson to account for the warranty and premium costs forfinancial reporting purposes. The balances in the accounts related to warranties andpremiums on January 1, 2019 are shown below:Inventory of Premium Cassette PlayersP39,950Estimated Premium Claims Outstanding44,800Estimated Liability from Warranties136,000

Sale Value of musical instrument 54,00,000 Estimated warranty cost % 2% Warranty…

Answered: O and P75,600, respectively O and…

O and P75,600, respectively O and P204,000, respectively O and P120,400, respectively unt should the estimated liability from wa 2019 statement of financial position of Jac 00 00 00

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

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 10RE

See similar textbooks

Related questions

Q: The following amounts were reported on the December 31, 2019, balance sheet: $ 8,000 20,000 15,000…

A: The question is multiple choice question and related to Ratio Analysis. Required Choose the Correct…

Q: windaer Lomparry buyan speratiuma un Jeruary 1, 2018. and uaa the everupe-coat muthud of pris ng…

A: Under average cost method, Inventory is valued at average cost. Under FIFO method, inventory is…

Q: The information below felates to questio Emily and Sibusisiwe are two sisters of the Nkoane family…

A: While other payable include wages payable,rent payables,purchase on credit other than supplies.

Q: Which of the following will be classified as a current liability? O a. Two-year noțes payable Ob.…

A: Please find the answer to the above question below:

Q: 2019 2018 2019 2018 Liabilities and Owners' Equity Current labities Assets Current assets 88,509 $…

A: (a).Current Ratio Current ratio = Current assets / Current liabilities Current Ratio 2018= .68 Times…

Q: Construct Pro-forma balance sheet and income statement for 2022 What is the external financing…

A: We are given the income statement and balance sheet of Pfizer corporation for 2021 and the…

Q: The consideration received from a contract with a customer that does not meet the criteria unde…

A: The objective of Philippines financial reporting standard 15 (PFRS 15) is the establishment of…

Q: ENTERPRISES 2019 and 2020 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2019 2020…

Q: BHP Group Ltd.- 2019 and 2020 Partial Balance Sheet Assets Liabilities & Owner’s Equity 2019 2020…

A: INCOME STATEMENT Income Statement is one of the Important Financial Statement of the Company. Income…

Q: The following figures have been extracted from the financial statements of Terry Ltd. STATEMENT OF…

A: Cash flow statement is a statement which is prepared to find out the cash comes in and goes out , by…

Q: LO 16-1 35. ELS Corporation reported gross receipts for 2017-2019 for scenarios A, B, and C as…

A: CORPORATIONS WITH ANNUAL AVERAGE GROSS RECEIPT DURING THE PAST 3 YEARS OF $25,000,000 OR LESS CAN…

Q: T-Account (Liability) CRNEED UNKOWN CR amountPlease provide in detail the equation for finding out…

A: The equation to be used for ending balance of Liability Account from where we can find out any…

Q: 2021 2020 2019 2018 0.51 0.57 0.60 0.36 Total Asset turnover 2022 AGL Energy 0.54 Origin Energy 0.46…

A: Total asset turnover is a financial ratio that measures a company's ability to generate revenue from…

Q: 11. LIBERTAD CO., is a VAT registered trader of construction supplies, had the following data for…

A: Value Added Tax: Value added tax is levied by the state government on the consumption of goods and…

Q: bdhdhdjdjdjjdis plz dont answer current ration in the following: Current Asset $20000., Current…

A: The current ratio is a measure of liquidity. It indicates the ability of the company to pay off its…

Q: HIC GROUP OF Companies COMPARATIVE INCOME STATEMENT For years ended 3rd December…

A: Income tax expense = Income before taxes x tax rate 2019 = 191,300 x 25% = 47,825 2020 = 197,847 x…

Q: The following are the composition of the total gross income of ABC Corp. a domestic corporation…

A: MCIT is also written as minimum corporate income tax. Given that, Gross income from operations =…

Question

At what amount should warranty expense and premium expense be shown in the
December 31, 2019 profit or loss statement of Jackson Music Emporium?
a. P108,00 and P56,950, respectively
b. P108,00 and P75,600, respectively
c. P136,00 and P204,000, respectively
d. P164,00 and P120,400, respectively
At what amount should the estimated liability from warranties be shown in the
December 31, 2019 statement of financial position of Jackson Music Emporium? a.
P80,000
b. P108,000
c. P136,000
d. P164,000
At what amount should the inventory of premium cassette players be shown in the
December 31, 2019 financial statements of Jackson Music Emporium? a. P39,950
b. P56,950
c. P204,000
d. P221,000
At what amount should the estimated premium claims outstanding be shown in the
December 31, 2019 financial statements of Jackson Music Emporium? a. P36,400
b. P44,000
c. P75,660
d. P84,000

Jackson Music Emporium Carries a wide variety of musical instruments, sound reproduction
equipment, recorded music, and sheet music. Jackson uses two sales promotion techniques
namely (a) warranties and (b) premiums to attract customers.
Musical instruments and sound equipment are sold with a one-year warranty for
replacement of parts and labor. The estimated warranty cost, based on past experience, is
2% of sales.
The premium is offered on the recorded and sheet music. Customers receive a coupon for
each peso spent on recorded music or sheet music. Customers may exchange 20 coupons
and P20 for a cassette player. Jackson pays P34 for each cassette player and estimates that
60% of the coupons given to the customers will be redeemed.
Jackson's total sales for 2019 were P7,200,000; P5,400,000 from musical instrument
and sound reproduction equipment and P1,800,000 from recorded music and sheet
music. Replacement parts and labor for warranty work totaled P164,000 during 2019. A
total of 6,500 cassette players used in the premium program were purchased during the
year and there were 1,200,000 coupons redeemed in 2019.
The accrual method is used by Jackson to account for the warranty and premium costs for
financial reporting purposes. The balances in the accounts related to warranties and
premiums on January 1, 2019 are shown below:
Inventory of Premium Cassette Players
P39,950
Estimated Premium Claims Outstanding
44,800
Estimated Liability from Warranties
136,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Current liabilities, Provisions and Contingencies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Splish Music Emporium is preparing its financial statements for the year ended December 31, 2020. Determine the amounts that will be shown on the 2020 financial statements for the following. (a) (b) (c) (d) Warranty Expense Warranty Liability $ Premium Expense $ Premium Inventory $ (e) Premium Liability BA
Majik Corporation offers a variety of electronic instruments, tooling equipment, technical reference books, and audio training manuals. Majik uses warranties and premiums as sales promotion techniques to attract customers. Electronic instruments and tooling equipment are sold with a 1-year warranty for replacement of parts and labor. Estimated warranty cost, based on past experience, is 1.5% of sales. The premium offered on technical reference books and audio training manuals allows customers receive an MP3 player in exchange 250 for coupons and $25. Customers receive 1 coupon for each dollar spent on technical reference books and audio training manuals. Each MP3 player costs $35 and Makjik estimates 65% of the coupons given to customers will be redeemed. Majik's total 2020 sales totaled $8,250,000 with $6,500,000 from electronic instruments and tooling equipment and $1,750,000 from technical reference books and audio training manuals. Warranty replacement parts and labor costs totaled…
BTS Music Shop carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. BTS uses two sales promotions techniques – warranties and premiums – to attract customers.Musical instruments and sound equipment are sold with one year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience is 2% of sales. The premium is offered on the recorded and sheet music. Customers may exchange 2,000 coupons and P200 for a Bluetooth speaker. BTS pays P320 for each speaker and estimates that 60% of the coupons given to customers will be redeemed. BTS’s total sales for 2019 were P72, 000,000 – P57, 000,000 from musical instruments and sound reproduction equipment and P15, 000,000 from recorded music and sheet. Replacement parts and labor for warranty work totalled P1, 640,000 during 2019. A total of 65,000 Bluetooth speakers used in the premium program were purchased during the year and there were P12, 000,000…
Popcorn Company manufactures and sells commercial ovens. It is currently running a promotion in which it pays a $750 rebate to any customer that purchases an oven from one of its participating dealers. The rebate must be returned within 60 days of purchase. Given its historical experience and the ease of obtaining a rebate, Popcorn expects all qualifying customers will receive the rebate. Required: Prepare the journal entry to record the sale of an oven to a participating dealer for $8,000.
Anderson's Accommodating Automobiles sells used cars. In order to incentivize sales, it offers a 3 year warranty for all used car sales. AAA uses a warranty servicing firm to service the payment of specific warranty obligations, with amounts for the year due on December 31. Internal analysts believe that, as a percentage of sales, warranty expenses will be 2% in the first year following the sale, 2.5% in the second year, and 1.5% in the third year. AAA sold $62.35 million in used cars in 2016, and had a balance in the Estimated Warranty Liability account of $2 million. AAA received a bill on December 31, 2020 for $2.5 million from the warranty servicing firm - $1.75 million related to sales prior years, and the rest relating to sales in 2016. The firm's normal discount rate, calculated as its weighted-average cost of capital, is 7%. Calculate the adjusting entry for warranties for 2020.
An entity sells goods with a warranty covering customers for the cost of repairs of any defects that are discovered within the first two months after purchase. Experience suggests that 60% of the goods sold will have no defects, 25% will have minor defects and 15% will have major defects. If minor defects were detected in all products sold the cost of repairs would be OMR 40,000; if major defects were detected in all products sold, the cost would be RO 200,000. What amount of provision should be made? a.OMR 30,000 b.None of the options c.OMR 40,000 d.OMR 35,000
Sew & More sells sewing machines and sewing supplies. The company recently ran a sales promotion on sewing machines that allowed customers to purchase a new sewing machine using store credit. The terms of the contract stated that customers would make 12 monthly payments that included a 6% annual interest rate. On the date of each sale, Sew & More should record. No revenue until the contract is paid in full. Sales revenue equal to the sales price of the sewing machine, interest revenue equal to the total amount of interest for the contract, and a receivable for the total of the sales price plus the interest. revenue equal to the sales price of the sewing machine plus the total interest to be collected and a receivable for the same amount. revenue equal to the sales price of the sewing machine and a receivable for the same amount.
Clearview Company manufactures and sells high-quality television sets. The most popular line sells for $1,000 each and is accompanied by a three-year warranty to repair, free of charge, any defective unit. Average costs to repair each defective unit will be $90 for replacement parts and $60 for labor. Clearview estimates that warranty costs of $12,600 will be incurred during 2012. The company actually sold 600 television sets and incurred replacement part costs of $3,600 and labor costs of $5,400 during the year. The adjusted 2012 ending balance in the Estimated Liability for Warranties account is $10,200. Required1. How many defective units from this year's sales does Clearview Company estimatewill be returned for repair?2. What percentage of sales does Clearview Company estimate will be returned forrepair?3. What steps should Clearview take if actual warranty costs incurred during 2013 aresignificantly higher than the estimated liability recorded at the end of 2012?
Consumer Corp. sells dishwashers and washing machines that come with a two-year unlimited warranty on parts and labour for repairs. The warranty is intended to assure customers that the appliances will operate as advertised. The warranty is expected to cost 4% of sales in the first year and 6% of sales in the second year, for a total of 10%. The provision for warranty has a credit balance of $161,000 at the beginning of 20X5. The following events and decisions relate to the warranty: 20X5 Sales revenue of $4,750,000 was generated from products covered by the warranty. Both the sale and the warranty provision must be recorded. 20X5 Warranty work consumed parts inventory with a cost of $8,500, and labour of $35,000. 20X6 Sales revenue from products covered by the warranty were $6,750,000. Both the sale and the warranty provision must be recorded. 20X6 Sales revenue of $6,750,000 was generated from products covered by the warranty. Warranty work…
Hill's Hardware Store is offering an incentive to customers. For every snowblowerr purchased at Hill's Hardware the customer will recieve a voucher for $25 off a future purchase. Each sale of a snowblower also includes complimentary maintenance. The maintenance can be performed by other vendors but most customers choose to have the maintenance done by Hill's Hardware. The snowblowers also include a one year warranty against any defects in workmanship without any additional charge to the customer. Assume you purchase a lsnowblower from Hill's Hardware. You leave the store with the snowblower and the voucher for $25 off a future purchase. How many performance obligations does Hill's Hardware have for this transaction? Question 24 options: a) 1 b) 2 c) 3
ABC sells products to customers with a warranty. Customers can return the products to ABC for a free replacement within 90 days of purchase. During April 2022, ABC sold 1,500 products to customers. During May, ABC sold 1,800 products to customers. Based on past sales, ABC estimates that 5% of all products sold will be returned for a free replacement. The products cost ABC $20 to produce and they are sold for $35 per item. During April, 100 products were returned and during May, 120 items were returned. As of March 31, 2022, ABC's Warranty Liability had a credit balance of $12,000. If ABC had an inventory balance of $80,000 on March 31, 2022, what should the inventory balance be on April 30, 2022? No purchases of inventory were made during April or May, 2022. Please enter all amounts as a positive number with no dollar signs or commas. For example, if the answer is $2,100, enter 2100. THE ANSWER IS NOT : 49800 , 30000 , 14880 , 48000
Blast sells portable CD players and each unit carries a one-year replacement warranty. The cost of repair defects under the warranty is estimated at 10% of the sales price. During May, Blast sells 650 portable CD players for $50 each. For what amount in May would Blast debit Product Warranty Expense? Select one: a. $3,250 b. $1,625 c. $650 d. $1,300