Socorro Company sells color television sets with a two-year repair warranty. The sale price for each set is P15,000. the average repair cost per set is P800. Research has shown that 20% of all sets sold are repaired in the first year and 40% in the second year. 2020 2021 Number of sets sold 300 500 Total payments for warranty repairs 40,000 150,000

Socorro Company sells color television sets with a two-year repair warranty. The sale price for each set is P15,000. the average repair cost per set is P800. Research has shown that 20% of all sets sold are repaired in the first year and 40% in the second year. 2020 2021 Number of sets sold 300 500 Total payments for warranty repairs 40,000 150,000

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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Pharoah sells 100 nonrefundable $50 gift cards for 3D printer paper on February 28, 2020. The paper has a standalone selling price of $50 (cost $36). The gift cards expiration date is June 30, 2020. Pharoah estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows. Redemption Total March 31 30 % April 30 75 June 30 90
ABC Company sold 10 units of goods with a unit list price of P2,000 on January 1, 2020. Given that the trade discount is 5% and the cash discount is 10%, and that the cash discount period is 10 days and the credit period is 30 days, if the customer settles the debt on January 11, 2020, what is the actual payments he needs to pay
Golden Dragon Restaurant obtained a $9000 loan at 9% compounded annually to replace some kitchen equipment. What is the size of the final payment if payments of $1800 are made semi-annually? $1335.50 $1800 $1500 $1394.30 $1667.76
56 In August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300 per product). The merchandise is to be delivered to M&H over the next 6 months. After 60 merchandises were delivered, the contract is modified and Commonlo promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Commonlo delivered an additional 90 products. All sales are cash on delivery. Assume that the additional term is a prospective modification to the original contract. How much revenue will be recognized on the contract for the year 2021?
Sheffield Corp. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Sheffield $5 each. Sheffield estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows: 2020 2021 Bags of dog food sold 520000 620000 Leashes purchased 19000 21000 Coupons redeemed 130000 130000 The premium liability at December 31, 2020 is O S73750. O $48750. O $63750. O $85750.
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10.Pirates PLC sells a line of goods under a six-month warranty. Any defect arising during that period is repaired free of charge. Pirates PLC has calculated that if all the goods sold in the last six months of the year required repairs the cost would be $2 million. If all of these goods had more serious faults and had to be replaced the cost would be $6 millionThe normal pattern is that 80% of goods sold will be fault-free, 15% will require repairs and 5% will have to be replaced. What is the amount of the provision required? Select one alternative: O $1.6 million O $6 million O $2 million O $0.6 million
Choke Company sells products with reusable and expensive containers. The customer is charged a deposit for each container delivered and receives a refund for each container returned within two years after the year of delivery. Containers unreturned at the beginning of 2020 P50,000 Containers delivered in 2020 500,000 Containers returned in 2020 240,000 Expired containers 30,000 How much is the deposit liability?
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4. Bonita.com sells 6800 units of its product for $460 each. The selling price includes a one- year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $40 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $4800. What amount should Bonita.com accrue on December 31 for estimated warranty costs? Select answer from the options below a. $8160 b. $32640 c. $ 4800 d. $3360
Moon Co. sells food blenders. During 2019, Moon made 37,000 blenders at an average cost of $80. It sold out 25,000 food blenders at an average price of $130. Moon provides a 2-year warranty for each blender sold and estimates 9% of blenders will be returned for warranty with an estimated cost of $36 each. By the end of 2019, Moon has spent $44,000 servicing the warranty repairs. All the above transactions have been settled in cash. During 2019, Moon has 50 employees who work 5-day per week and get paid each other Friday. Salaries of $324,000 and payroll expense of $37,000 have been paid until December 22. Since the business grows quickly, Moon needs cash to expand. By the end of 2018, the Board of Directors authorized the management to issue 10-year bonds with a par value of $3,000,000, annual contract interest rate of 8% and semi-annual interest payments. Moon chose to use the straight-line method to amortize discount or premium on its bonds. On January 1, 2019, management…