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rued Product Warranty heral Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 rrent estimated product warranty payable $2,788 $2,994 ncurrent estimated product warranty payable 4,802 5,338 al $7,590 $8,332 sume that GM's sales were $147,049 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term Provide the journal entry for the Year 2 product warranty expense. If an amount box does not require an entry, leave it blank.

rued Product Warranty heral Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 rrent estimated product warranty payable $2,788 $2,994 ncurrent estimated product warranty payable 4,802 5,338 al $7,590 $8,332 sume that GM's sales were $147,049 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term Provide the journal entry for the Year 2 product warranty expense. If an amount box does not require an entry, leave it blank.

FINANCIAL ACCOUNTING
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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Accrued Product Warranty General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 Current estimated product warranty payable $2,788 $2,994 Noncurrent estimated product warranty payable 4,802 5,338 Total $7,590 $8,332 Presume that GM's sales were $147,049 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Year product warranty expense. If an amount box does not require an entry, leave blank. 88 c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Transcribed Image Text:Accrued Product Warranty General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 Current estimated product warranty payable $2,788 $2,994 Noncurrent estimated product warranty payable 4,802 5,338 Total $7,590 $8,332 Presume that GM's sales were $147,049 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Year product warranty expense. If an amount box does not require an entry, leave blank. 88 c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
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