16th Edition

ISBN: 9781323425084

Author: MILLER-NOBLES

Publisher: PEARSON C

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Textbook Question

Chapter 11, Problem 11.28AP

Journalizing liability transactions

The following transactions of Oscar Landing occurred during 2016:

Apr. 30	Landing is party to a patent infringement lawsuit of $220,000. Landing's attorney is certain it is remote that Landing will lose this lawsuit.
Jun. 30	Estimated warranty expense at 2% of sales of $420,000.
Jul. 28	Warranty claims paid in the amount of $5,800.
Sep. 30	Landing is party to a lawsuit for copyright violation of $110,000. Landing's attorney advises that it is probable Landing will lose this lawsuit. The attorney estimates the loss at $110,000.
Dec. 31	Landing estimated warranty expense on sales for the second half of the year of $460,000 at 2%.

Requirements

1. Journalize required transactions, if any, in Landing's general journal. Explanations are not required.

2. What is the balance in Estimated Warranty Payable assuming a beginning balance of $0?

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Chapter 11, Problem 11.27AP

Chapter 11, Problem 11.29AP

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Solution Summary: The author explains that Liabilities are debt and obligations of a business. They may be Current liabilities, and Long-term liabilities.

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