Use the information for the next two (2) questions. Bold Company estimated annual warranty expense at 2% of annual net sales. The net sales for the current year amounted to P4,000,000. At the end of the current year, the warranty liability was P60,000 and the warranty payments during the current year totaled P50,000. What is the warranty expense for the current year?

Use the information for the next two (2) questions. Bold Company estimated annual warranty expense at 2% of annual net sales. The net sales for the current year amounted to P4,000,000. At the end of the current year, the warranty liability was P60,000 and the warranty payments during the current year totaled P50,000. What is the warranty expense for the current year?

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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2) Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales. On May 1, 2022, after reviewing its most recent year end number for actual warranties paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022, Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%. Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.
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The company had sales of $3,400,000. The estimated % that will be returned under the warranty is 1.5%. Record the journal entry for the estimated warranty expense
Smith Electic (SE) owed Estimated Warranty Payable of $1,100 at the end of 2023. During 2024, SE made sales of $100,000 and expects product warranties to cost the company 5% of the sales. During 2024, SE paid $2,600 for warranties. What is SE's Estimated Warranty Payable at the end of 2024? OA. $2,600 OB. $5,000 O C. $6,100 OD. $3,500
Product A comes with a two year warranty when purchased by customers. The estimated warranty costs as a percentage of dollar sales are 3% in the year of sale and 5% in the second year after the sale. The following information relates to sales and warranty expenditures of Product A Actual warranty expenditures $ 10,000 $ 35,000 Year Year 1 Year 2 Sales $400,000 $500,000 Which of the following is NOT part of the required journal entry in Year 1 based on the above information? Multiple Choice Credit cash $10,000 Debit warranty expense $12,000 None of the other alternatives are correct Debit warranty expense $32,000 Credit sales $400,000
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Marigold Advertising was founded in January 2013. Presented below are adjusted and unadjusted trial balances as of December 31, 2020. Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Interest Payable Notes Payable Unearned Service Revenue Salaries and Wages Payable Common Stock MARIGOLD ADVERTISING TRIAL BALANCE DECEMBER 31, 2020 Unadjusted Retained Earnings Service Revenue Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense Dr. $18,810 22,900 8,710 3,730 63,430 11,720 370 4,500 $134,170 Cr. $30,670 14,467 -0- 4,700 6,590 -0- 10,580 3,750 63,413 $134,170 Dr. Adjusted $18,810 26,011 2,795 2,949 63,430 12,961 781 511 4,700 5,915 4,500 $143,363 Cr. $35,370 14,467 141 4,700 5,142 1,241 10,580 3,750 67,972 $143,363
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