Ping Company began operations on May 1, 2016, and experienced the following events during the year: 1. 2. 3. 4. 5. Purchased $160,000 of merchandise inventory for cash. Sold all the merchandise for $240,000 cash and guaranteed the merchandise sold to be free from defects for one year following the date of sale. $ 800 debit $ 800 credit $2,400 debit $2,400 credit Paid $50,000 cash for salaries expense. Estimated future warranty liability of $2,400 (1% of sales). Paid $1,600 cash to repair defective merchandise returned by a customer. After Ping Company makes the necessary adjusting and closing entries at the end of 2016, what is the ending balance in its Warranties Payable account?
Ping Company began operations on May 1, 2016, and experienced the following events during the year: 1. 2. 3. 4. 5. Purchased $160,000 of merchandise inventory for cash. Sold all the merchandise for $240,000 cash and guaranteed the merchandise sold to be free from defects for one year following the date of sale. $ 800 debit $ 800 credit $2,400 debit $2,400 credit Paid $50,000 cash for salaries expense. Estimated future warranty liability of $2,400 (1% of sales). Paid $1,600 cash to repair defective merchandise returned by a customer. After Ping Company makes the necessary adjusting and closing entries at the end of 2016, what is the ending balance in its Warranties Payable account?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ping Company began operations on May 1, 2016, and experienced the following
events during the year:
1.
2.
3.
4.
5.
$800 debit
$ 800 credit
Purchased $160,000 of merchandise inventory for cash.
Sold all the merchandise for $240,000 cash and guaranteed the
merchandise sold to be free from defects for one year following
the date of sale.
After Ping Company makes the necessary adjusting and closing entries at the end
of 2016, what is the ending balance in its Warranties Payable account?
$2,400 debit
$2,400 credit
Paid $50,000 cash for salaries expense.
Estimated future warranty liability of $2,400 ( 1% of sales).
Paid $1,600 cash to repair defective merchandise returned by a
customer.
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