Siomai Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2020: • Net sales- P3,200,000 • Warranty liability (debit balance before adjustment) - P10,000 • Warranty liability (credit balance after adjustment)- P54,000. Which of the following entries was made to record the 2020 estimated warranty expense? A. DR: Warranty Expense- P54,000 and Retained Earnings- P10,000; CR: Estimated Warranty Liabilities- P64,000 B. DR: Warranty Expense- P64,000; CR: Retained Earnings- P10,000 and Estimated Warranty Liabilities- P54,000 C. DR: Warranty Expense- P44,000; CR: Estimated Warranty Liabilities- P44,000 D. DR: Warranty Expense 64,000; CR: Estimated Warranty Liabilities- P64,000

Siomai Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2020: • Net sales- P3,200,000 • Warranty liability (debit balance before adjustment) - P10,000 • Warranty liability (credit balance after adjustment)- P54,000. Which of the following entries was made to record the 2020 estimated warranty expense? A. DR: Warranty Expense- P54,000 and Retained Earnings- P10,000; CR: Estimated Warranty Liabilities- P64,000 B. DR: Warranty Expense- P64,000; CR: Retained Earnings- P10,000 and Estimated Warranty Liabilities- P54,000 C. DR: Warranty Expense- P44,000; CR: Estimated Warranty Liabilities- P44,000 D. DR: Warranty Expense 64,000; CR: Estimated Warranty Liabilities- P64,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...

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Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
Charm Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2019. Net Sales P 3,200,000 Warranty Liability account: Balance, Jan. 1, 2019 10,000 debit before adjustment Balance , Dec. 31, 2019 54,000 credit after adjustment. Which of the following entries was made to record the 2019 estimated warranty expense? * A.Debit Warranty Expense 64,000 and Credit Estimated liability under warranties 64,000 B.Debit warranty Expense 64,000 Credit Accumulated profits/losses 10,000 and Estimated liability under warranties 54,000 C.Debit Warranty Expense 54,000 and Accumulated profits/losses 10,000 and Credit Estimated liability under warranties 64,000 D.Debit Warranty Expense 44,000 and Credit Estimated liability under warranties 44,000
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