Question 28.Pear Corp. sells 1,000,000 tablet computers per year at a cost of $500.00 each. Every tablet issold with a one-year warranty. Based on its past experiences, Pear Corp. believes that onepercent (1%) of the tablets sold will result in a product warranty claim during the current fiscalyear, at an average cost of $100.00.This contingent liability is probable and can be reasonably estimated. Based on this information,what should Pear Corp. record as a joumal entry during the current fiscal year ("Year 1") torecognize this loss contingency?DateAccountCreditDebit(Year 1] Accounts Receivable$1,000,000.00Purchase returns and allowances$1,000,000.00BDateAccountDebitCredit(Year 1] Accrued Liability Payable (Warranty) $4,000,000.00Warranty Expense$4,000,000.00DateAccountDebitCredit[Year 1] Purchase returns and allowancesS1,000,000.00Accounts Receivable$1,000,000.00DateAccountDebitCredit[Year 1) Warranty Expense$1,000,000.00Accrued Liability Payable (Warranty)S1,000,000.00EDateАссountDebitCredit[Year 1] Warranty Expense$4,000,000.00Accrued Liability Payable (Warranty)$4,000,000.00 Question 29.Widgets Depot, Inc. Is a publicly traded company that is engaged in a manufacturing business.Included among Widgets Depot's assels are those that are tangible (such as manufacturingequipment, vehicles, and warehouses) and intangiblo (such as palents). Widget Depotpurchases raw matorials in bulk, which it uses in the production of its goods.Widgets Depot expects that, for the current fiscal year (which just bogan for the company), It willprobably recognize the following (which are all reasonable estimates)$70,000.00 as a depreciation expense for certain tangible assets that it owns;$6,000.00 as an amortization expense for Widget Depot's patents,$9,000.00 for damaged raw materials that Widget Depot bought and will return;And a $300,000.00 net gain from an infringement action that Widget Depot broughtagainst a competitor, which is expected to be decided in the coming months.Using those amounts from the above that meet the definition of a contingency (underAccounting Standards Codification 450 (ASC 450), what is the total (or nat) gain or loss thatmay result from Widgets Depot, Inc.'s contingencies?(A) $385,000.00(B) 5300,000.00(C) $76,000.00(D) $215,000.00Question 30,Big Lender Corp. ("BLC") was notified some time ago that consumers are coordinating to bring aclass action lawsuit against the company for allegedly violating the Truth in Lending Act("TILA"). BLC did not complete its financial statements before it learned of the potential lawsuit.While a complaint has not been filed yet, BLC's analysis found the following: (1) igation of thismatter is highty likely: (2) if a claim is brought, the outcome will probably be unfavorable to BLC;and (3) BLČS actions at issue here were known before the financial statements werecompleted. While BLC cannot reasonably estimate the potential loss, the number of consumersaffected means that an unfavorable litigation result would yield a material loss to BLC.Which of the following accurately reflects how BLC should proceed as it completes its financialstatements?(A) BLC should recognize a loss, accrued using the company's reasonable estimate, but itcannot include additional disclosure in the financial statement footnotes.(B) BLC must disclose the potential loss-and the disclosure needs to include a range ofreasonable estimate values for that loss-but BLC has the option to accrue the loss ornot.(C) BLC should neither disclose nor acorue the ligation loss contingency.(D) BLC should include a disclosure in the financial statement footnoles regarding thepotential loss contingency, noting that a reasonable ostimate of the loss is not yetfeasible.(E) BLC should Include disclosure in the financial statement footnotes regarding thepolential loss contingency and must recognize the amount accrued for the loss if it doesso.

Hi student Since there are multiple questions, we will answer only first question.

Answered: Question 28. Poar Corp. sells 1,000,000…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hi, I think I have part 1 correct as listed below, but I need help with the second part with the Accrued Warranty Payable T account in Question 2.
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11. On January 1, 2011, Camry Company received a two-year P500,000 loan. The loan calls for interest payments to be made at the end of each year based on the prevailıng market rate at January 1 of each year. The interest rate at January 1, 2011 was 10%. Fortuner Company also has a two-year P500,000 loan but Fortuner's loan carries a fixed interest rate of 10%. Camry Company does not want to bear the risk that interest rates may increase in the second year of the loan. Fortuner Company believes that rates may decrease and it would prefer to have variable debt. So the two entities enter into an interest rate swap agreement whereby Fortuner agrees to make Camry's interest payment in 2012 and Camry likewise agrees to make Fortuner's interest payment in 2012. The two entities agree to make settlement payments, for the difference only, on December 31, 2012. If the interest rate on January 1, 2012 is 8%, what will be Camry's settlement with Fortuner? a. 10,000 payment b.…
Current Attempt in Progress Wildhorse Inc, manufactures and sells computers that include an assurance-type warranty for 90 days. Wildhorse offers an optional extended coverage plan under which it will repair or replace any defective part for three years from the expiration of the assurance- type warranty. Because the optional extended coverage plan is sold separately, Wildhorse determines that the three years of the extended coverage represent a separate performance obligation. The total transaction price for the sale of a computer and the extended warranty is $3,420 on October 1, 2023. Wildhorse determines that the stand-alone selling price of each is $3,220 and $200. respectively. Further, Wildhorse estimates, based on historical experience, that it will incur $230 in costs to repair defects that arise within the 90-day coverage period for the assurance-type warranty. The cost of the equipment is $1,400 (b) Prepare the journal entry (or entries) to record the cash sale of the…
Sales made in 2021 for $3,000,000 includes a 2-year warranty coverage, included in the price. The estimated cost for warranty is expected to be 2% for the first year and 5% for the second year. How much warranty expense should be recorded in 2021? Question 4 options: $60,000 $150,000 $100,500 $210,000
Adams, Inc. sells widgets that come with an unconditional five-year warranty. According to Adams' best estimates, 7.8% of all units sold will require repair or replacement under that warranty, and the average cost of honoring one warranty claim is $60. During 2023, Adams' first year of operations, 176,000 widgets were sold, 1,278 of which were repaired or replaced under warranty claims. On its December 31, 2023 balance sheet, what amount of warranty liability will Adams report?
Creative Computing sells a laptop computer called the Creative Package to Professor Smith with an extended warranty for $780. The $780 price of a Creative Package includes the following: One laptop Computer A one year basic assurance warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to one year. An agreement that Professor Smith will pay an additional $75 to purchase an extended 1 year warranty. How many performance obligations are included in this sale of the Creative Package? Question 13 options: a) 1 b) 2 c) 3 d) 4
Subject:
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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

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