CHECK FIGURES: c. $15,470, d. 59,750Shefford Cutlery extends a lifetime replacement warranty on all units sold. Using past experience, thecompany estimates that 0.5% of units sold will be returned and require replacement at an average cost of$130 per unit. On January 1, 2017, the balance in Shefford's Estimated Warranty Liability account was$15,600. During 2017, sales totalled $3,600,000 or 15,000 units. The actual number of units returned andreplaced was 76.Requireda. Prepare the entry to estimate warranty liabilities based on the units sold for 2017. Assume theadjustment is made on December 31.3.2. Record the replacement of the units returned in 2017 (use a date of December 31).Calculate the balance in the Estimated Warranty Liability account at December 31, 2017.What is the warranty expense that will appear on the income statement for the year endedDecember 31, 2017?4.

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Shefford Cutlery extends a lifetime replacement warranty on all units sold. Using past experience, the company estimates that 0.5% of units sold will be returned and require replacement at an average cost of 5130 per unit. On January 1, 2017, the balance in Shefford's Estimated Warranty Liability account was 515,600. During 2017, sales totalled $3,600,000 or 15,000 units. The actual number of units returned and eplaced was 76. Required a. Prepare the entry to estimate warranty liabilities based on the units sold for 2017. Assume the adjustment is made on December 31. 2. Record the replacement of the units returned in 2017 (use a date of December 31). Calculate the balance in the Estimated Warranty Liability account at December 31, 2017. 3. 1876

Shefford Cutlery extends a lifetime replacement warranty on all units sold. Using past experience, the company estimates that 0.5% of units sold will be returned and require replacement at an average cost of 5130 per unit. On January 1, 2017, the balance in Shefford's Estimated Warranty Liability account was 515,600. During 2017, sales totalled $3,600,000 or 15,000 units. The actual number of units returned and eplaced was 76. Required a. Prepare the entry to estimate warranty liabilities based on the units sold for 2017. Assume the adjustment is made on December 31. 2. Record the replacement of the units returned in 2017 (use a date of December 31). Calculate the balance in the Estimated Warranty Liability account at December 31, 2017. 3. 1876

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 57BE

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