Question 13 Masterpiece Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $603,000 in sales. In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,500. Which of the following is the entry needed to record the replacement of the defective goods? O Warranty Expense Estimated Warranty Payable O Estimated Warranty Payable Merchandise Inventory 18,090 18,090 18,500 18,500 16,500 O Estimated Warranty Payable Merchandise Inventory O Warranty Expense Merchandise Inventory 16,500 18,090 18,090

Question 13 Masterpiece Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $603,000 in sales. In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,500. Which of the following is the entry needed to record the replacement of the defective goods? O Warranty Expense Estimated Warranty Payable O Estimated Warranty Payable Merchandise Inventory 18,090 18,090 18,500 18,500 16,500 O Estimated Warranty Payable Merchandise Inventory O Warranty Expense Merchandise Inventory 16,500 18,090 18,090

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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QUESTION 2 Gyampat Enterprises sold goods to customers but retain the title of the goods till the receipt of money. The goods are normally sold on three months credit and title of the goods also passed to the buyers after receipt of money. Gyampat Enterprises also give warranty for three months for un-satisfactory performance. At the balance sheet date goods for which title has not been transferred and eligible for warranty are GHS 1,250,000. The markup on these goods is 25%. Past experience tells that 80% goods have no claim, 10% returned but can be sold at the original value and remaining 10% have no value at all. Calculate the amount of provision Gyampat Enterprises should be created in the financial statements?
Quèstion 12 Classic Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 4% of sales revenue. In 2018, the company had $602,000 of sales. In the same year, it paid out $12,000 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable O Warranty Expense Estimated Warranty Payable O Estimated Warranty Payable 24,080 24,080 18,060 18,060 12,000 Cash 12,000 O Warranty Expense 18,060 Sales Revenue 18,060
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QUESTION 1 a. Kpogo Ltd has the following products in inventory at the end of 2019: Units Cost per unit GH¢ XYZ (completed) 540 22 ABC (part complete) 280 26 Each product normally sells at GH¢34 per unit. Due to the difficult trading conditions, Kpogo Ltd intends to offer a discount of 15% per unit and expects to incur GH¢4 per unit in selling costs. GH¢10 per unit is expected to be incurred to complete each unit of ABC. Required: In accordance with IAS 2 Inventories, at what amount should inventory be stated in the financial statements of Kpogo Ltd as at 31 December 2019? b. According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must select and apply its accounting policies consistently from one period to the next and among various items in the financial statements. However, an entity may change its accounting policies under certain conditions. Required: Identify the circumstances under which it may be appropriate to change accounting policy in…
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Question 12 On August 1, 2020, Alba Trading sold a machine for $13,000 cash with a two-year parts warranty. On March 1, 2021, the machine requires on-site repairs which cost $200 of the repair parts inventory. Alba estimates warranty costs to be 4% of dollar sales. In 2020, Alba reports warranty expense of: O A. $ 720. O B. $ 320. O C. $ 520. O D. $ 200.
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Question 4