PHAGE COMPANY estimates its annual warranty expense at 4% of net sales. The followingbalances are given by EUSTASS: Net sales – 1,500,000; warranty liability – balance 12/31/2021debit (before adjustment) of 10,000; warranty liability - balance 12/31/2021 credit (afteradjustment) of 50,000. Which of the following entries was made to record the 2021 estimatedwarranty expense?a. Warranty expense60,00010,000Retained earningsWarranty liability50,000b. Warranty expenseRetained earningsWarranty liability50,00010,00060,000c. Warranty expenseWarranty liability40,00040,000d. Warranty expenseWarranty liability60,00060,000

Estimated warranty expenses = sales x 4% = 1500000 x 4% = 60,000

Answered: PHAGE COMPANY estimates its annual…

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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On the first day of the fiscal year, a company issues $69,000, 9%, seven-year installment notes that have annual payments of $13,710. The first note payment consists of $6,210 of interest and $7,500 of principal repayment. a. Journalize the entry to record the issuance of the installment notes. b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank.
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,987 units. It is estimated that warranty repairs will average $17 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of a.$35,545 b.$0 c.$50,779 d.$15,234
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The company had sales of $3,400,000. The estimated % that will be returned under the warranty is 1.5%. Record the journal entry for the estimated warranty expense
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On July 8, Jones Inc. issued an $69,300, 6%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends July 31. Using a 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? When required, round your answer to the nearest dollar. )a. $798 b. $266 Oc. $4,158 Od. $532
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A business issued a 60-day, 4% note for $21,600 to a creditor on account. The company uses a 360-day year for interest computations. Journalize the entries for (a) the issuance of the note and (b) the payment of the note at maturity, including interest. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. a. b. ?
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,392 units. It is estimated that warranty repairs will average $17 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of Oa. $40,664 Ob. so Oc. $28,465 Od. $12,199

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