Swifty's R Us sold 1130 high end convection ovens during 2023 at a price of $1650, with a warranty guarantee that the product was free from any defects. The cost of each oven is $1090 and includes a $10 one-year assurance warranty. In addition, Swifty's R Us sold extended warranties on 690 ovens for four years beyond the one-year period for $430 each. What is the total value of the liability related to the warranties? $296700 $0 O $308000 O $11300
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- Amazing Company provides a warranty with all its products it sells. It estimates that it will sell 1,200,000 units of its product for the year ended December 31, 2021, and that its total revenue for the product will be P100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be P5 for each product sold, and the cost for a major defect cost is P15. The company also estimates that the minimum amount of warranty expense will be P2,500,000 and the maximum will be P12,000,000.How much is the Provision for Warranty to be reported at December 31, 2021?Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year? fill in the blank 1Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year?
- Gen sells cellular phones. Each phone sells for P10,000 and carries a warranty against defects of period of 1 year counting from the date of purchase. The firm sold 60,000 phones in 2019. Past experience indicates that 10% of the phones will need some type of repair during the warranty period. In the past, the firm has incurred expenditures at P400 on each telephone needing repair due to manufacturing defects. At the beginning of the year, the Estimate Liability for Warranties account had a credit of P59,400. Actual expenditures during the year amounted to P1.5M. The balance of the Estimated Liability for Warranties at year-end is: O 500,000 O 2,400,000 O 1,500,000 0 950,000Duong-Burnett Products introduced a new line of commercial sprinklers in 2023 that carry a one-year warranty against manufacturer’s defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experience of others in the industry. Based on that experience, warranty costs were expected to approximate 2% of sales. Sales of the sprinklers in 2023 were $3,400,000. Accordingly, the following entries relating to the contingency for warranty costs were recorded during the first year of selling the product: General Journal Debit Credit Accrued liability and expense Warranty expense (2% × $3,400,000) 68,000 Warranty liability 68,000 Actual expenditures (summary entry) Warranty liability 31,280 Cash (or salaries payable, parts and supplies, etc.) 31,280 In late 2024, the company's claims experience was evaluated and it was determined that claims were far more than expected—3% of sales…ProWasher began production of a new dishwasher in June 2023, and by December 31, 2023 had sold 100,000 units to various retailers for $500 each. Each dishwasher is sold with a one-year warranty included. The company estimates that its warranty expense per dishwasher will amount to $25. Warranties similar to these are available for sale for $75. By year end, the company had already paid out $1 million in warranty expenditures on 35,000 units. ProWasher’s records currently show a warranty expense of $1 million for 2023. ProWasher’s retail division rents space from Park Malls. ProWasher pays a rental fee of $6,000 per month plus 5% on the amount of yearly profits that is over $500,000. ProWasher’s CEO, Burt D. Washer, tells you that he had instructed the previous accountant to increase the estimate of bad debts expense and several other estimates in order to keep the retail division’s profits at $475,000. Required: Adress possible liabilities
- During 2024, Foxfire Company introduced a new line of machines that carry a three-year warranty against defects. Based on experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales were P1,200,000, P3,000,000 and P4,200,000 for 2024, 2025, and 2026, respectively. Actual warranty expenditures were P18,000, P90,000 and P270,000 for 2024, 2025 and 2026, respectively. What amount should be reported as warranty liability on December 31, 2026?Matrix Company sold 5,000 computers on September 1, 2024, at a total price of $5,000,000, with a warranty guarantee that the product was free of defects. The cost of the computers is $3,550,000. The term of this assurance warranty is 2 years, which Matrix estimates will cost $77,000. In addition, Matrix sold extended warranties related to 2,000 computers for 3 years beyond the 2-year period for $180 per computer. On November 22, 2024, Matrix incurred labor costs of $3,000 and part costs of $25,000 related to the assurance warranties. Matrix prepares financial statements on December 31, 2024. It estimates that its future assurance warranty costs will total $50,000 at December 31, 2024. A) Prepare the journal entries to record this transaction on September 1, 2024. B) Prepare the journal entry on November 22, 2024. C) Prepare the journal entry on December 31, 2024 (assuming financial statements are prepared on December 31).The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2020, and that its total revenue for the product will be $100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be $5 for each product sold, and the cost for a major defect cost is $15. The company also estimates that the minimum amount of warranty expense will be $2,000,000 and the maximum will be $10,000,000. 2. Bolivia is involved in a tax dispute with the tax authorities. The most likely outcome of this dispute is that Bolivia will lose and have to pay $400,000. The minimum it will lose is $20,000 and the maximum is $2,500,000. Instructions Prepare the journal entry to record provisions, if any, for Bolivia at December 31, 2020.
- USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Trail Runner USA can expect warranty costs during the five-year period to add up to 3% of sales. Assume that a Trail Runner USA dealer in Denver, Colorado, made sales of $670,000 during 2018. Trail Runner USA received cash for 35% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $19,000 during 2018. Record the sales, warranty expense, and warranty payments for Trail Runner USA. Ignore cost of goods sold. Post to the Accrued Warranty Payable T-account. The beginning balance was $16,000. At the end of 2018, how much in accrued warranty payable does Trail Runner USA owe to its customers?Woodmier Lawn Products introduced a new line of commercial sprinklers in 2023 that carry a one-year warranty against manufacturer's defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experience of others in the industry. Based on that experience, warranty costs were expected to approximate 2% of sales. Sales of the sprinklers in 2023 were $2.5 million. Accordingly, the following entries relating to the contingency for warranty costs were recorded during the first year of selling the product: Debit Credit General Journal Accrued liability and expense Warranty expense (2% x $2,500,000) 50,000 Warranty liability Actual expenditures (summary entry) Warranty liability Cash In late 2024, the company's claims experience was evaluated and it was determined that claims were far more than expected-3% of sales rather than 2%. 50,000 23,000 23,000 Required: 1. Assuming sales of the sprinklers in 2024 were $3.6…Woodmier Lawn Products introduced a new line of commercial sprinklers in 2023 that carry a one-year warranty against manufacturer's defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experience of others in the industry. Based on that experience, warranty costs were expected to approximate 2% of sales. Sales of the sprinklers in 2023 were $2.8 million. Accordingly, the following entries relating to the contingency for warranty costs were recorded during the first year of selling the product: General Journal Accrued liability and expense Warranty expense (2% × $2,800,000) Warranty liability Actual expenditures (summary entry) Warranty liability Cash Debit 56,000 Required 1 Required 2 25,000 Credit 56,000 In late 2024, the company's claims experience was evaluated and it was determined that claims were far more than expected-3% of sales rather than 2%. View transaction list 25,000 Required: 1. Assuming…