Right Answer Unified Computing Hub (UCH) sells computers for $2,500 each and alsoprovides a 3-year warranty, which requires the company to perform periodicservices and replace defective parts. During 2023, the company sold 900computers. Based on past experience, the company has estimated the total 3-year warranty costs per computer as $50 for parts and $90 for labor. (Assumesales all occur on December 31, 2023.) In 2024, UCH incurred actual warrantycosts relative to 2023 computer sales of $15,000 for parts and $30,000 for labor.Under the expense warranty treatment (accrual method), what is the balanceunder current liabilities in the 2023 balance sheet?

Concept of Warranty ExpenseThe warranty expense is the estimated cost a company expects to incur for…

Answered: Unified Computing Hub (UCH) sells…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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Unified Computing Hub (UCH) sells computers for $2,500 each and also provides a 3-year warranty, which requires the company to perform periodic services and replace defective parts. During 2023, the company sold 900 computers. Based on past experience, the company has estimated the total 3-year warranty costs per computer as $50 for parts and $90 for labor. (Assume sales all occur on December 31, 2023.) In 2024, UCH incurred actual warranty costs relative to 2023 computer sales of $15,000 for parts and $30,000 for labor. Under the expense warranty treatment (accrual method), what is the balance under current liabilities in the 2023 balance sheet? a. $126,000 b. $145,000 c. $155,000 d. $136,000
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What is the belence under current liabilities in the 2024 balance sheet??
Carla Vista Resellers Ltd. (CVRL) sells gently used and refurbished appliances. The company provides a three-month warranty that is included in the cost of the appliance. Claims under the warranties vary from replacing defective parts to providing customers with new appliances if repairs cannot be made. During 2024, the estimated cost related to the three-month warranties was $36,480, of which $24,000 had been incurred before year end ($18,240 on replacement appliances and $5,760 for parts). For an additional charge of $144, CVRL also offers extended warranty coverage for three years on its refurbished appliances. This amount is expected to cover the costs associated with the extended warranties. During 2024, CVRL sold 480 three-year warranty plans. The costs incurred during the year for repairs and replacements under these plans amounted to $14,400. Based on experience, the company estimates that its total warranty costs over the three-year coverage period will be $43,200, which it…
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Oriole Equipment Company sells computers for $1,220 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 950 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.)In 2021, Oriole incurred actual warranty costs relative to 2020 computer sales of $10,000 for parts and $15,000 for labor. Part 1 Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record sale of computers) 2020 (To record…
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