a. To prepare: The required journal entries for recording sold wireless router for the current year. Given information: Products sold by the company are worth $11,200,000. Cost of products sold is $5,000,000. Estimated warranty cost is 4% of the total sales. Service-type warranties sold 45000 @ $85 per contract. Customers claimed $286,000 against assurance-type warranty. Customers claimed $185,000 against service-type warranty. Company uses perpetual inventory system.

Question

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Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

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Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

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Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

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Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

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Answer 5

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

Answer 6

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

Answer 7

Chapter 13, Problem 13.7P

1.

To determine

a.

To prepare: The required journal entries for recording sold wireless router for the current year.

Given information:

Products sold by the company are worth $11,200,000.

Cost of products sold is $5,000,000.

Estimated warranty cost is 4% of the total sales.

Service-type warranties sold 45000 @ $85 per contract.

Customers claimed $286,000 against assurance-type warranty.

Customers claimed $185,000 against service-type warranty.

Company uses perpetual inventory system.

Answer 8

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

Answer 9

b.

To determine

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

Answer 10

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

Answer 11

c.

To determine

To prepare: The required journal entries for recording actual repairs for the current year.

Answer 12

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

Answer 13

d.

To determine

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

Answer 14

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

Answer 15

e.

To determine

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

Answer 16

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

Answer 17

f.

To determine

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

Answer 18

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

Answer 19

2.

To determine

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

Answer 20

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

Answer 21

3.

To determine

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

Answer 22

Expert Solution & Answer

Answer 23

Expert Solution & Answer

Answer 24

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Answer 25

Ch. 13 - Prob. 13.1Q Ch. 13 - Prob. 13.2Q Ch. 13 - Prob. 13.3Q Ch. 13 - Do sellers recognize sales taxes as expenses on...Ch. 13 - Prob. 13.5Q Ch. 13 - Prob. 13.6Q Ch. 13 - Prob. 13.7Q Ch. 13 - What is a gam contingency? Is It accrued and...Ch. 13 - Do firms always accrue and record loss...Ch. 13 - Prob. 13.10Q

Solution Summary: The author explains journalizing, the process of recording the transactions of an organization in a chronological order.

To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.

To prepare: The required journal entries for recording actual repairs for the current year.

To prepare: The required journal entries for recording service-type warranty contract sales for the current year.

To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.

To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.

The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.

To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.

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Chapter 13 Solutions