15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: * Year of sale. Year after sale . 3 percent 5 percent Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Actual Warranty Expenditures P 200,000 700,000 Sales P 8,000,000 10,000,000 2020 2021 What amount should COCONUT report as its estimated liability as of December 31, 2021? P 40,000 P 740,000 O P 240,000 O P 540,000
Q: In 2020, KD Corporation began selling a new line of products that carry a two-year warranty against…
A: Warranty is a form of assurance given by the seller to the buyer that in case any defect came out in…
Q: On January 1, 2021, ACORN Company offered a three-year warranty from date of sale on any of its…
A: Expected Warranty cost = (Sales - sales return) x 2% = (₱9,000,000 - ₱9,000,000*1/5) x 2% = ₱144,000
Q: 1)Suppose the company in the previous question offers a two-year extended warranty, which it sells,…
A: Given:Company offers two year extension warrantyExtended warranty sales total=$20000During 2020 the…
Q: The selling price of the Appliances Company's units is P 80,000 each. The buyers are provided with a…
A: The warranty Expense is the expense estimated based on past year experience depending on sales…
Q: Bull has a one-year product warranty on selected items in its product line. The estimated warranty…
A: Estimated warranty liability 2021 = P 416000 Warranty claims honored 2021 = P 416000 Estimated…
Q: During 2019, Lawton Company introduced a new line of machines thatcarry a 3-year assurance-type…
A: Warranty is a form of assurance given by the seller of the goods to the customer that if there is…
Q: During 2024, Foxfire Company introduced a new line of machines that carry a three-year warranty…
A: Warranty is a form of assurance being given by seller to the buyer that in case there is any defect…
Q: An entity normally provides 4% warranty on its products. The provision in the first quarter was for…
A: Warranty expenses is a form of assurance being provided by seller to the buyer that in case product…
Q: The Price is Right manufactures electronic systems. The company provides a one-year warranty for all…
A: The warranty Expenses are estimated on the basis of percentage of the sales of current period,…
Q: What is the warranty expense for 2020? What is the warranty expense for 2021? What is the warranty…
A: Given information is: In 2020, Pluto Company started selling new computer that carried a 2-year…
Q: 1) In January 2020, Simon Corporation began selling a new line of products that carry a two-year…
A: Formula: Warranty expense for 2021 = Warranty Liability at the end of 2021 + Actual Warranty…
Q: In 2020, Dare Company began selling a new calculator that carried a two-year warranty against…
A: A warranty liability is a liability account in which a company records the amount of the repair or…
Q: During 20X1, Grove Corporation sells products with a two-year warranty and pays $45,000 to service…
A: Prepaid expense: It is the amount of expense that is paid in advance for the future period.
Q: Kap Co. offers a three year warranty on its products. Kap previously estimated warranty costs to be…
A: Warranty expenses are those repair or replacement costs that are projected to be incurred or have…
Q: E9-17 Assurance-Type Warranties On September 1, 2019, Carolina Electronics Company has 1,000 Blu-ray…
A: 1. Date Account Titles and Explanation Debit Credit Oct 1, 2019 Cash (900 x 125) $112,500…
Q: Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During…
A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…
Q: For the year 2024, how much is ABCs net profit from warranty contracts?
A: Therefore as per above working note, P 800,000/- shall be deferred revenue for warranty claims in…
Q: During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The…
A: The liabilities are the amount due to be paid in near future. The warranty Expenses are estimated…
Q: 1. On January 1, 2019, EROS Company introduced a new line of products that carries a 3-year warranty…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: 1. During 2019, Yamashita 10 points Company introduced a new product carrying a two-year warranty…
A: Warranty expense refers to the amount that the business has already incurred for the product repair…
Q: Cupola Awning Corporation introduced a new line of commercial awnings in 2021 that carry a two-year…
A: Yes, this situation represents a loss contingency.
Q: Perry Company sells 3,000 units of its product for $ 500 each in 2021. The selling price includes a…
A: Calculation of Estimated Warranty Liability on December 31, 2021 Amount Estimated Warrant…
Q: 15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The…
A: Warranty means where the company is undertaking to make good the loss which has been incurred due to…
Q: ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year…
A: Calculation of unearned warranty revenue: Warranty contract. = P2000 No. Of contracts. =…
Q: 4. LIZARD, Inc. provided warranty for all products sold during 2021. The entity sold 200,000 units…
A: Solution: There are 40% chance to lose tax dispute case, therefore liability is not certain and…
Q: 4. WALNUT Department Store sells gift certificates, redeemable for store merchandise that expires…
A: Unearned revenue is the amount of revenue which is received in advance but not yet earned by the…
Q: In 2020, Dubious Company began selling new line of products that carry a two-year warranty against…
A: Warranty expense is the cost associated with a defective product repair, replacement, or refund.…
Q: Cupola Awning Corporation introduced a new line of commercial awnings in 2018 that carry a two-year…
A: Contingent liability: The contingent liability is not treated as a liability of the company on the…
Q: 2. During 2020, Joaquin Company introduced a new line of machines that carry a two-year warranty…
A: Year 2020 Estimated warranty expenses and liability= Year of sale= P1000000*1%= P10000 Year after…
Q: Munster sells a product with a four-year warranty. Warranty costs are estimated as a percentage of…
A:
Q: In 2019, Caramel Corporation began selling a new line of products that carry a two-year warranty…
A: Warranty liability: When a firm incurs warranty liabilities, it records the amount of repair or…
Q: Problem 1 In 2020, Plumpton Company started selling new computer that carried a 2-year warranty…
A: The warranty expense is the expense which arises with the sales made during the period.
Q: The Price is Right manufactures electronic systems. The company provides a one-year warranty for all…
A: The warranty liability is estimated on the basis of past years experiences and the number of units…
Q: Leppard Corporation sells DVD players. The corporation also offers its customers a 4-year warranty…
A: Definition: Contingencies: A business situation that occurs due to uncertain business conditions…
Q: In 2018, Bare company began selling a new calculator that carried a two-year warranty against…
A: The estimated liability for warranties include the amount of estimated warranty Expenses that is not…
Q: 21, ABC Company provided 2,000 such warranty contracts at an average price of P810 each. Related to…
A: Receipts from the service contracts for 3years = 2,000 warranty contracts * 810 =1,620,000 Annual…
Q: During 2020, Red Company introduced a new product carrying a two-year warranty against defects. The…
A: Warranty liability - It is the liability that company expects to incurred for the repair and…
Q: In 2019, Shiftry Corporation began selling a new line of products that carry a two-year warranty…
A: The warranty expenses are estimated in the basis of past year expenses related to expenditures…
Q: Calm Co. provides warranty for its products. Experience shows that 10% of products sold require…
A: Cash Flow statement means the statements which show the cash outflow and inflow of the organisation…
Q: 5. Warranties. In the calendar year 2020, Golden Enterprises sold 4,000 units its product for…
A: The warranty costs are the expenses paid for the defects or other repairs costs for the sales…
Q: August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…
A: As per IAS 15 Revenue recognition if additional contract is an prospective modification to the…
Q: Chato Company sells electrical goods covered by a one-year warranty for any defects. Of the sales of…
A: Warranty is a form of assurance being provided by the seller to the customer that if product will be…
Q: 4. WALNUT Department Store sells gift certificates, redeemable for store merchandise that expires…
A: Unearned revenue is the amount of revenue that is received in advance but not yet earned by the…
Q: Giordano Corp. sold machinery for $2,000,000 and it was delivered in November 2020. On November 20,…
A: Standalone value is a method of valuation that assesses a company's worth in its current condition…
Q: During 2020, Buenas Company introduced a new product carrying a two-year warranty against defects.…
A: The question is based on the concept of Financial Accounting.
Q: 48. An Entity sold 10 units of goods with a unit list price of P2,000 on Jan. 1, 2021. The Entity…
A: Solution: List price = P2,000 Trade price = List price - Trade discount = P2,000 - (P2,000*5%) =…
Q: Central Products sells a certain press for $20,000. Included in this price is an implied service…
A: Adjusting journal entry: At year end when company finalise its accounts then any unrecognized income…
Q: Chato Company sells electrical goods covered by a one-year warranty for any defects. Of the sales of…
A: The amount should be recognized as a warranty provision will be equal to total of estimated cost of…
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- Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.
- Assurance-Type Warranty Clean-All Inc. sells washing machines with a 3-year assurance-type warranty. In the past, Clean-All has found that in the year after sale, warranty costs have been 3% of sales; in the second year after sale, 5% of sales; and in the third year after sale, 7% of sales. The following data are also available: Required: 1. Prepare the journal entries for the preceding transactions for 20192021. Closing entries are not required. 2. What amount would Clean-All report as a liability on its December 31, 2021, balance sheet, assuming the liability had a balance of 88,200 on December 31, 2018? 3. Next Level How would the failure to recognize a contingent liability affect the financial statements?During 2020, Red Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 4% within 12 months following sale and 6% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales Actual Expenditures2020 P5,000,000 P150,0002021 6,000,000 550,000At December 31, 2021, what would be reported as estimated warranty liability?a. P360,000 b. P400,000 c. P240,000 d. P50,000During 2020, Buenas Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 4% within 12 months following sale and 6% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales Actual Expenditures P5,000,000 P150,000 6,000,000 550,000 At December 31, 2021, what would be reported as estimated warranty liability? a. P360,000 b. P400,000 c. P240,000 d. P50,000
- In 2020, KD Corporation began selling a new line of products that carry a two-year warranty against defects.Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows:First year of warranty 2%Second year of warranty 5%Sales and actual warranty expenditures for 2020 and 2021 are presented below: 2020 2021Sales P900,000 P1,200,000Actual warranty expenditures 30,000 60,000What is the estimated warranty liability at the end of 2021?a. P87,000 b. P24,000 c. P57,000 d. P147,00015. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: What amount should COCONUT report as its estimated liability as of December 31, 2021? a. ₱ 740,000 b. ₱ 40,000 c. ₱ 240,000 d. ₱ 540,000During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2021 and 2022 are as follows: Sales Actual Warranty Expenditures 2021 P 800,000 P12,000 2022 1,000,000 30,000 P1,800,000 P42,000 At December 31, 2022, Eaton should report an estimated warranty liability of
- Veneer Company started selling a new product that carried a two-year warranty against defect. Based upon pastexperience with other products, the estimated warranty costs related to peso sales are computed as follows:first year of warranty 3%second year of warranty 5%Total sales and actual warranty repairs for 2019 and 2020 are given below:2019 2020Sales P420,000 P696,000Actual warranty expenditures 14,880 18,000What amount should Veneer report as its estimated warranty liability as of December 31, 2020?Prepare all entries related to the above transactions of Veneer Company.During 2021, JJJ Co. introduced a new line of machines that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows:Sales / Actual Warranty / Expenditures2021 / 600,000 / 9,0002022 / 1,500,000 / 65,0002023 / 2,100,000 / 135,000What amount should JJJ report as a liability at December 31, 2023?2. During 2020, Joaquin Company introduced a new line of machines that carry a two-yearwarranty against manufacturer’s defects. Based on industry experience, the estimatedwarranty cost percentages related to peso sales are as follows:Year of sale 1%Year after sale 6%Sales and actual warranty expenditures for 2020 and 2021 were as follows:Year Sales Actual warranty expenditures2020 P1,000,000 P54,0002021 1,400,000 89,000a. How much is the warranty expense to be recognized in 2020 and 2021,respectively?b. What is the estimated warranty liability as of December 31, 2020 and 2021,respectively?