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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EX.06.144 On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company sold the note to a bank at a 13% discount rate. Required:Compute the amount of interest revenue and the loss on sale of the note. Assume a 360-day year. Round your answers to two decimal places. Interest revenue $ Loss on sale of note $
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Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. Sold 150 razors for $12,000 cash. December 16 December 29 December 31 January 5 January 17 January 31 Problem 11-4A (Algo) Part 1 Replaced 20 razors that were returned under the warranty. Recognized warranty expense related to December sales with an…
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Net revenues Standard warranty liability, end of year 158 Charges incurred during the year 163 Extended warranty deferred revenue, end of year 573 Revenue deferred for new extended warranty contracts 260 Warranty expense Required: 1. Compute the amount of warranty expense for 2017 and 2018. (Enter your answers in millions of dollars.) No 1 View transaction list View journal entry worksheet 2 2018 2. Prepare journal entries to record both the warranty expense for 2018 and the payments made under the warranty during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions of dollars.) Transaction A 2017 B 2018 2017 2016 $81,591 $81, 139 $81,919 192 205 606 307 Warranty expense Estimated warranty liability Estimated warranty liability Cash 196 204 571 303 General Journal Debit Credit Ⓒ
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Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $13 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 80 razors for $6,400 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 16 razors that were returned under the warranty. December 16 Sold 240 razors for $19,200 cash. December 29 Replaced 32 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 160 razors for $12,800 cash.…
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