Warranty Expense: A home improvement store sells lawnmowers and includes a warranty they will be free of defects for 1 year. The store estimates $2 per lawnmower sold will result in warranty covered defects. The company sells 1000 lawnmowers during the accounting period. The company also replaces $600 worth of lawnmowers due to ACTUAL warranty issues with customers during the accounting period. What is the Warranty Expense based on All the information above for the accounting period. O $2,000 O $1,400 O $600 O $2,600

Warranty Expense: A home improvement store sells lawnmowers and includes a warranty they will be free of defects for 1 year. The store estimates $2 per lawnmower sold will result in warranty covered defects. The company sells 1000 lawnmowers during the accounting period. The company also replaces $600 worth of lawnmowers due to ACTUAL warranty issues with customers during the accounting period. What is the Warranty Expense based on All the information above for the accounting period. O $2,000 O $1,400 O $600 O $2,600

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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Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000. Marques adjusts its accounts monthly. A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022. Instructions: a) Prepare the adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022.
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 4% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,700 goals and 45 have been repaired. If the estimated cost to repair a goal is $120, what would be the Warranty Liability at the end of the year? $0. $17,210. $22,560. $17,160.
1. What amount of warranty expense should be shown on Crassula's income statement for the year ended December 31, 2021? 2. What amount of warranty liability should be shown on Crassula's statement of financial position as of December 31, 2021?
On 9/1, the Knight's Stop issues a new part to a customer to replace a defective part the customer purchased the previous year. The new part was issued under the two-year warranty offered on all parts sold by company. On 9/1, Knight's Stop would debit which account for the journal entry? O Accounts Receivable O Inventory O Warranty Payable O Accounts Payable O Warranty Expense O Cash O Current Portion Long-term Debt ASUS f4 f5 E3 f6 f7 f8 f9 f11 f10 团 & 4 5 6 7 8. Y. U 因图 %24
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Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $420,000. Actual warranty expenditures in January of the following year were $14,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 5% of sales. 2. Record the payment of the actual warranty expenditures of $14,000 in January of the following year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Record warranty expense and warranty liability for the month of December based on 5% of sales. Note: If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. View…
Wally Co. began selling merchandise on November 1, 2022. The company offers a 50-day warranty for defective merchandise. Based on prior experience with similar merchandise, Wally Co. predicts that 2.80% of the units sold will encounter a fault within the warranty period, with a replacement or repair of a damaged unit costing an average of $30. In November, Wally Co. sold 25,000 units and 400 defective units were returned. In December, Wally Co. sold 32,000 units and 544 defective units were returned. The actual cost of replacing the defective units was $38,500. Prepare a journal entry to accrue for the estimated warranty costs for the November and December sales at December 31, 2022. Prepare one summary journal entry at December 31, 2022, to record the cost of replacing the defective merchandise returned during November and December. What amounts will be included in Wally Co.’s 2022 income statement and balance sheet at December 31, 2022, with regard to the warranty? Show steps…
A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500. 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3? Warranty Liability
A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500.
On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $16,800 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $11,200 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to…
Fantastic Co. sold $150,000 of kitchen appliances during August under a six month warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On September 12, a customer required a $2000 part replacement plus $90 of labor under the warranty. Journal entry to record estimated warranty expenses will be: Select one: a. Provision for product warranty Dr 9,000 Warranty Expenses Cr 9,000 b. Provision for product warranty Dr 2090 Warranty Expenses Cr 2090 c. Right option is not listed d. Warranty Expenses Dr 7,500 Provision for product warranty Cr 7,500
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