What is the estimated liability from warranties?A. 1,920,000B. 1,080,000C. 240,000D. 800,000 Items 3 to 7 are based on the following information.JACKSON Music Emporium carries a wide variety of musical instruments,sound reproduction equipment, recorded music, and sheet music. Topromote the sale of its products, JACKSON uses two promotiontechniques premiums and warranties.PREMIUMSThe premium is offered on the recorded and sheet music. Customersreceive a coupon for each P10 spent on recorded music and sheet music.Customers may exchange 200 coupons and P200 for a DVD player. JACKSONpays P340 for each DVD player and estimates that 60% of the couponsgiven to customers will be redeemed. A total of 6,500 DVD players usedin the premium program were purchased during the year and there were1,200,000 coupons redeemed in 2020.WARRANTIESACCNTG2♥ | 1Musical instruments and sound reproduction equipment are sold with aone-year warranty for replacement of parts and labor. The estimatedwarranty cost, based on past experience, is 2% of sales. Replacementparts and labor for warranty work totalled P1, 640,000 during 2020.JACKSON's sales for 2020 totaled P72,000,000 P54,000,000 frommusical instruments and sound reproduction and equipment andP18,000,000 from recorded music and sheet music. The balances in theaccounts related to warranties and premiums on January 1, 2020, wereas shown below:Inventory of premium DVD playersEstimated premium claims outstandingEstimated liability for warrantiesP 399,500448,0001,360,000

Warranty is a form of promise or assurance being given by seller to the buyer that in case product…

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What is the estimated liability from warranties? A. 1,920,000 B. 1,080,000 C. 240,000 D. 800,000

College Accounting (Book Only): A Career Approach

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Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter10: Cash Receipts And Cash Payments

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Jackson Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music and sheet music. Jackson uses two sales promotion techniques namely (a) warranties and (b) premiums, to attract customers.Musical instruments and sound equipment are sold with a one-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales.The premium is offered on the recorded and sheet music. Customers receive a coupon for each peso spent on recorded music or sheer music. Customers may exchange 200 coupons and P20 for a cassette player. Jackson pays P34 for each cassette player and estimates that 60% of the coupons given to the customer will be redeemed.Jackson's total sales for 2022 were P7,200,000; P5,400,000 from musical instruments and sound reproduction equipment and P1,800,00 from recorded music and sheet music. Replacement parts and labor for warranty work totaled P164,000 during 2022. A total of 6,500…
GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2018, GoodBuysold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31,2018, $30,000 of the remaining gift cards had passed the date at which GoodBuy concludes that the cards willnever be redeemed. How much gift card revenue should GoodBuy recognize in 2018?
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Lamplight Plus sells lamps to consumers. The company contracts with a supplier who provides them with lamp fixtures. There is an agreement that Lamplight Plus is not required to provide cash payment immediately and instead will provide payment within thirty days of the invoice date. Additional information: • Lamplight purchases 25 light fixtures for $25 each on August 1, invoice date August 1, with no discount terms. Lamplight returns 5 light fixtures (receiving a credit amount for the total purchase price per fixture of $25 each) on August 3. • Lamplight purchases an additional 15 light fixtures for $10 each on August 19, invoice date August 19, with no discount terms. • Lamplight pays $130 toward its account on August 22. What amount does Lamplight Plus still owe to the supplier on August 30? What account is used to recognize this outstanding amount?