Accrued Product Warranty Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $14,047 $13,467 Noncurrent estimated product warranty payable 8,544 7,530 Total $22,591 $20,997 Assume that Harbour's sales were $165,663 million in current Year and that the total paid on warranty claims during the current year was $14,481 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Current Year product warranty expense. Enter your answers in millions. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Accrued Product Warranty Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $14,047 $13,467 Noncurrent estimated product warranty payable 8,544 7,530 Total $22,591 $20,997 Assume that Harbour's sales were $165,663 million in current Year and that the total paid on warranty claims during the current year was $14,481 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Current Year product warranty expense. Enter your answers in millions. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 34E
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Transcribed Image Text:Accrued Product Warranty
Harbour Company disclosed estimated product warranty payable for comparative years as follows:
(in millions)
Current Year Prior Year
Current estimated product warranty payable
$14,047
$13,467
Noncurrent estimated product warranty payable
8,544
7,530
Total
$22,591
$20,997
Assume that Harbour's sales were $165,663 million in current Year and that the total paid on warranty claims during the current year was $14,481 million.
a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash
the business relative to the quick current assets and other longer-term
b. Provide the journal entry for the Current Year product warranty expense. Enter your answers in millions.
c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
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