Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit

Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $200. Ace sold 30,000 appliances during 2020.The estimated warranty liability at the beginning of the year was $ 3,000. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. Required: Calculate the estimated warranty expense for Ace Appliances for 2020. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020. For the month of November 2020, Ace Appliances recorded $ 280,000 in sales, which were all on account. The company is required to charge 7% PST and 6% GST on all sales. Required: Prepare the journal entry to record the company's sales activity for November 2020. Debit Credit On September 30, 2020, Ace Appliances (above) borrowed $200,000 from the People's National Bank on a nine-month, 8% note. Required: Give the journal entry on June 30, 2021 when the note is paid by Ace Appliances. Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Blake Department Store sells television sets with one-year warranties that cover repair and replacement of television parts. In the month of June, Blake sells forty television sets with a per unit cost of $500. If Blake estimates warranty fulfillment at 10% of sales, what would be the warranty liability reported in June? A. $1,000 B. $2,000 C. $500 D. $20,000
A companys sales for January are $250,000. If the company projects warranty obligations to be 5% of sales, what is the warranty liability amount for January?
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.)
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Ace Appliances Inc. offers a 12-month warranty on all its appliances. AceAppliances estimates that one appliance out of each 1000 sold will require warranty service andthat the average cost per warranty claim is $300. Ace sold 30,000 appliances during 2020. Theestimated warranty liability at the beginning of the year was $ 4,500. Claims of $7,000 wereactually paid during the year to honour warranties. Ace Appliances has a December 31 year-end.Required:1. Calculate the estimated warranty expense for Ace Appliances for 2020.___________________2. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020
Ace Appliances Inc. offers a 12-month warranty on all its appliances. AceAppliances estimates that one appliance out of each 1000 sold will require warranty service and that the average cost per warranty claim is $300. Ace sold 30,000 appliances during 2020. The estimated warranty liability at the beginning of the year was $ 4,500. Claims of $7,000 were actually paid during the year to honour warranties. Ace Appliances has a December 31 year-end. 1. Calculate the estimated warranty expense for Ace Appliances for 2020 2. Calculate the balance of the Estimated Warranty Liability account at December 31, 2020.
Talarczyk Company sold 10,000 Super-Spreaders on December 31, 2020, at a total price of $1,000,000, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $550,000. The assurance warranties extend for a 2-year period and are estimated to cost $40,000. Talarczyk also sold extended warranties (service-type warranties) related to 2,000 spreaders for 2 years beyond the 2-year period for $12,000. Given this information, determine the amounts to report for the following at December 31, 2020: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash.