Kindly help me with accounting questions Phoenix Appliances was established to sell refrigerators that come with a 180-daywarranty against defects. Engineering studies suggest that 5% of the units sold will bedefective and require an average repair cost of $75 per unit. During Phoenix's first year,32,000 units were sold. What is the estimated warranty expense for the year?

Step 1: Definition of Estimated Warranty ExpenseThe estimated warranty expense is a provision made…

Answered: Phoenix Appliances was established to…

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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Backpack Co. was organized to sell a single product that carries a 45-day warranty againstdefects. Engineering estimates indicate that 2% of the units sold will prove defective andrequire an average repair cost of $60 per unit. During Backpack’s first month of operations,total sales were 900 units; by the end of the month, five defective units had been repaired.The liability for product warranties at month-end should bea. $1,380.b. $300.c. $1,080.d. $780.
outback Co. was organized to sell a single product that carries a 45 day warranty against defects. Engineering estimates indicates that 12% of the units sold will prove defective and require an average repair cost of $20 per unti. During outbacks first month of operations, total sales were 200 untis; by the end of the month, nine defective units had been repaired. The Liability for product warrantees at month end should be. a.$180 b.$660 c.$300 d.$480
Evergreen Appliance Co. Was established to sell a single product.... Please answer the general accounting question
Accounting Question
Fidelity Life Insurance has a document imaging system that needs replacement. A local salesperson quoted a cost of $10,000 with an estimatedsalvage of $900 after 5 or more years. If the system is expected to save $1700 per year in clerical time, find the payback time at 8% per year. As a practice, the office manager purchases equipment only when the payback is less than 6 years. Otherwise, he prefers to lease. Should the imaging system be purchased or leased?
Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. What other factors should Best Trim consider when making its decision?
Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17,000 units per order?
Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. Should Best Trim purchase 204,000 units at the start of the year or 17,000 units each month? Show your calculations.
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Hayden Inc. has a number of copiers that were bought four years ago for $26,000. Currently maintenance costs $2,600 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $8,600. The machines have a current resale value of $8,600, but at the end of year 2, their value will have fallen to $4,100. By the end of year 6, the machines will be valueless and would be scrapped. Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $31,000, and the company can take out an eight-year maintenance contract for $1,400 a year. The machines would have no value by the end of the eight years and would be scrapped. Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%. a. Calculate the equivalent annual cost, if the copiers are: (i)…
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Ecco Company sold $136,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 6% of the sales price. On October 15, a customer required a $100 part replacement, plus $85 labor under the warranty. a. Provide the journal entry for the estimated expense on September 30. If an amount box does not require an entry, leave it blank. b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.

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