Problem 3-13 (AICPA Adapted)On April 1, 2020, Ash Company began offering a new productfor sale under a one-year warranty.Of the 50,000 units in inventory at April 1, 2020, 30,000 hadbeen sold by June 30, 2020.Based on experience with similar products, the entityestimated that the average warranty cost per unit sold wouldbe P80.Actual warranty costs incurred from April 1 through June30, 2020 totaled P700,000.1. What is the warranty expense for 2020?a. 2,400,000b. 4,000,000c. 2,000,000d. 1,200,0002. On June 30, 2020, what amount should be reported asestimated warranty liability?a. 1,600,000b. 3,300,000c. 1,700,000d.900,000

Here in this question, we are required to calculate warranty expense for 2020 and estimated warranty…

Answered: Problem 3-13 (AICPA Adapted) On April…

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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Concord Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale-2% of sales; second year after sale-4% of sales; and third year after sale-5% of sales. Sales and actual warranty expenditures for the first three years of business were: Sales Warranty Expenditures 2021 $750,000 $ 15,900 2022 1,010,000 46, 000 2023 1,017, 000 80,000 (a) Calculate the amount that Concord should report as warranty expense on its 2023 income statement and as a warranty liability on its December 31, 2023 SFP using the assurance - type warranty (expense - based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above. Warranty expense Warranty liability
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Swifty Company must make computations and adjusting entries for the following independent situations at December 31, 2026. 1. Its line of amplifiers carries a 3-year warranty against defects. On the basis of past experience, the estimated warranty costs related to dollar sales are first year after sale-2% of sales revenue; second year after sale-3% of sales revenue; and third year after sale-5% of sales revenue. Sales and actual warranty expenditures for the first 3 years of business were: Sales Revenue 2024 $764,500 2025 1,177,800 2026 1,155,500 Warranty Expenditures $6,330 16,190 64,340 Compute the amount that Swifty should report as a liability in its December 31, 2026, balance sheet. Assume that all sales are made evenly throughout each year with warranty expenses also evenly spaced relative to the rates above. Liability that should be reported on December 31, 2026 $ 2. With some of its products, Swifty includes coupons that are redeemable in merchandise. The coupons have no…
Subject - account Please help me. Thankyou.
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On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment note requiring payment of $21,500 annually for five years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. Glanville should record sales revenue in January 2021 of: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $107,500 $81,502 $89,652 None of these answer choices are correct.
Subject:
Early in 2020, Larkspur Equipment Company sold 600 Rollomatics at $5,800 each. During 2020, Larkspur spent $21,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. Prepare 2020 entries for Larkspur assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $58,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $21,000. Estimate revenues to be recognized on a straight-line basis. Date Account Titles and Explanation Debit Credit
Part A: Giordano Corp. sold machinery for $2,000,000 and it was delivered in November 2020. On November 20, the customer informed Giordano Corp. that they were satisfied with the machinery. Giordano Corp. provided a warranty on the machinery for two years from November 20, 2020. The initial estimated warranty cost to Giordano Corp was estimated at $200,000. The stand-alone-value of the warranty is $150,000 and of the machinery is $1,900,000. The machinery can be purchased without the warranty by the customer. What would be the amount of unearned revenue on November 20 recorded by Giordano Corp.? (Round percentages to whole numbers). Show your work. a) Between $1,800,000-$1,900,000 b) Between $150,000-$160,000 c) None of the choices d) Between $140,000 - $147,000 e) Between $1,900,000-$2,000,000
Required information Exercise 8-15A Record warranties over two years (LO8-5) [The following information applies to the questions displayed below.) Lindy Appliance begins operations in 2021 and offers a one-year warranty on all products sold. Total appliance sales in 2022 are $25,000. Also in 2022, Lindy has additional sales of $2,400,000 and revises its estimate of warranty costs associated with sales in 2022 to be 1.5%. Exercise 8-15A Part 4 4. What is the balance in Warranty Llability at the end of 2021 and 2022? Answer is complete but not entirely correct. 2022 7.000 Os 29,000 2021 Warranty Liobility s

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