amount of provision on product warranty
Q: During 2021, Truffle Company sold 500,000 boxes of hotcakes under a new sales promotional program.…
A: The unredeemed coupon is treated as a liability because the company either has to provide goods or…
Q: Hopewell sells a line of goods under a six-month warranty. Any defect arising during that period is…
A: We have the following information: Hopewell has calculated that if all the goods sold in the last…
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: Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and…
A: Outstanding Liability can be calculated by deducting actual coupon cost from Premium expense.…
Q: 2. Pistons company sells portable DVD players for P28,000 each and offers to each customer a 3-year…
A: Warranty means the undertaking given by the company selling the goods that in case of any defect ,…
Q: During 2020, ABC Company sold 500,000 boxes of brownies mix under a new sales promotional program.…
A: The question is based on the concept of Financial Accounting.
Q: Lex Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Cute Company…
A: % of boxtops that will be redeemed = 60% on sales of 675,000 boxtops = 6,75,000×60% = 405000 boxes
Q: Robinson Co. is interested in purchasing a new delivery vehicle so it can become a subcontractor…
A: Net Present Value: It is applied to series of cash flows happening at various times and represent…
Q: Edmonds Company includes 1 coupon in each box of soap powder that it packs, and 5 coupons are…
A: Record the purchase of premiums.
Q: During 2020, STU Company sold 500,000 boxes of brownies mix under a new sales promotional program.…
A: Net premium expense = Cost of baking pan + Handling and Shipping - Remittance from customer = 50 + 5…
Q: Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount…
A: First Quarter Details: Tax rate = 32% Sales = P13,000,000 Rebate = 10% * 1,100,000 = P110,000 Cost…
Q: During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each…
A: Total estimated coupons that should be redeemed = 50,000 boxes ×80% = 40,000
Q: Bonita Industries is purchasing new equipment with a cash cost of $ 211800 for the assembly line.…
A: Present value = $211,800 Annuity = $45,800 Period = 6
Q: REH sells architectural designs to clients. In 2020, the company sold 120 designs for P3,600,000.…
A: Sales revenue: Sales revenue can be defined as the income generated by the company though selling…
Q: warranty
A: Provision for warranty = Number of units sold * Percentage of units returned for repair * Warranty…
Q: On August, 2019, KBO consigned to UFO 10 laptops costing P15,000 each, paying freight charge of…
A: This question deals with the concept of consignment and consignee. In consignment business there are…
Q: In 2020, Plumpton Company started selling new computer that carried a 2-year warranty against…
A: Warranty Expenses : Sale Value = P5,000,000 No Defect = 80% Major Defect = 5% Minor…
Q: Sony introduces a new compact music player to compete with Apple’s iPod that carries a two-year…
A: Warranty provision: It can be defined as a provisional liability that is accounted for, by the…
Q: The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its…
A: Step 1 The warranty expense is $5,000,000. It is obtained by adding the product of the number of…
Q: total amount of interest earned in 2022?
A: Interest earned refers to the amount that is earned from the investments paid by the holder in…
Q: require an annual fee of 50,000 and an interest of 1% per month. On March 1, 2020, 3,000,000 is used…
A: Interest on remaining period on purchase value in credit line Purchase value = 30,00,000 used upto…
Q: USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles,…
A: Note: A journal entry is a form of accounting entry that is used to report a business transaction in…
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: A company borrowed P45,200 from a savings and loan association that charges 14% converted quarterly.…
A: Let us make an amortization table to solve the question. Please note the formula used to calculate…
Q: On January 1, 2021, Stoops Entertainment purchases a building for $580,000, paying $110,000 down and…
A: Solution: Journal Entries Date Particulars Debit Credit 31-Jan-21 Interest expense…
Q: and that 70% of the warranty costs are expended in the year of sale and 30% in the following year.…
A: A warranty clause refers to the offering mentioned in a contract that specifies a promise regarding…
Q: Fry Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Fry boxes and…
A: Solution : Total boxes sold 675000 Boxes that is estimated to be sent by customers (60% of…
Q: Socorro Company sells color television sets with a two-year repair warranty. The sale price for each…
A: Warranty Liability: When a firm incurs warranty liabilities, it records the amount of repair or…
Q: A software company that installs systems for inventory control using RFID technology spent $600,000…
A: Inventory is the investment in material which is done by the firm. Firm maintains the level of…
Q: Carla Corporation sells DVD players. The corporation also offers its customers a 4-year warranty…
A: Warranty revenue recognized = Unearned warranty revenue / Contract term
Q: A factory operator bought a diesel generator set for P10,000 and agreed to pay the dealer uniform…
A: Loan amount = P 10,000, Interest rate = 8%, Time Period = 5 Years
Q: Charm Company sells 1,000 units of radio sets at P9,000 each for cash. Each radio set is under…
A: Total estimated warranty expense = Sales units x 60% x warranty cost per unit = 1000 units x 60% x…
Q: Robinson Co. is interested in purchasing a new delivery vehicle so it can become a subcontractor…
A: Investment Appraisal: It is a process a business attempts to assess likely significant activities…
Q: On December 28, 2021, Tristar Communications sold 10 units of its new satellite uplink system to…
A: 1/10, n/30 means, company will given the discount of 1% if the customer will paid the amount within…
Q: Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops…
A: Sometimes, customers are provided with offer of sending empty boxes to the company and in return…
Q: 6. Contracting company plans to update its equipment so that its trucks are replaced after five…
A: As per the concept of time value of money the worth of money changes with passage of time because…
Q: On December 28, 2021, Tristar Communications sold 10 units of its new satellite uplink system to…
A: Given, Sales = 10 units @ $25,000 each Term = 1/10, n/30
Q: What amount should be reported as the warranty expense for 2021 and 2022, respectively * The selling…
A: Warranty Expenses Most of the companies are provide warranty service to their customer to replace…
Q: During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program.…
A: Requirement 1: The calculation of premium expenses is as follows: The resultant table is as…
Q: Carla Vista Company sells goods to Pearl Company during 2020. It offers Pearl the following rebates…
A: A rebate is a type of purchase discount that is provided in the form of a reduction, return, or…
Q: luna Company sold 700,000 boxes of “puto” mix under a new sales promotional program. Each box…
A: Liability is the obligation for the owner of the entity in which certain amounts are to be paid back…
Q: Marigold Company includes one coupon in each box of soap powder that it packs, and 10 coupons are…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each…
A: Premium (Gift) means the product given free of cost to the customer on fulfilling the certain…
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: Bramble Corp. is purchasing new equipment with a cash cost of $312000 for an assembly line. The…
A: Interest is the amount paid over and above the principal amount on loan. It is other expenses of a…
Q: Choke Company sells products with reusable and expensive containers. The customer is charged a…
A: Liability Liability is an obligation to pay an amount to the parties from whom the firm or person…
Q: Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and…
A: Expenses means the amount spent on running the business where as income means the amount earned…
Q: A company offers a cash rebate of P1 on each P4 package of light bulbs sold since 2015.…
A: Cash rebate is the form of discount that is being provided to customers on purchase of products.…
Q: What is the EAC to keep a piece of new equipment operating? The warranty covers repair costs for the…
A: Step1: EAC: Equivalent Annual Cost, refers to the cost of operating, maintenance..etc annualized…
4. A business sells 5,000 appliances at P8,000 each, which carry a one-year repair warranty. If minor repairs were to be required to appliances sold in 2022, the repair cost would be P600 each. If major repairs were needed on all goods sold, the cost would be P1,500 each. It is estimated that 40% of goods sold in 2022 will have no defects, 45% will have minor defects, and 15% will have major defects. What amount of provision on product warranty should the company recognize for 2022?
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- Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000
- Lastly, can you show me how to do this one? 22. In 2018, XYZ, Inc. sold 2,000 beds for $50 each. The beds carry a 2-year warranty for repairs. XYZ estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the beds during 2018? Assets = Liabilities + Stockholders’ Equity Revenues – Expenses = Net IncomeDuring 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000Problem 1 In 2020, Plumpton Company started selling new computer that carried a 2-year warranty against defects Plumpton sold P5,000,000 computers evenly throughout 2020. 50% of the sales are expected to be repaired in 2020 and the rest in 2021. The entity estimated that 80% of the products will have no defects. 5% will have major defects and 15% will have minor defects. If all products were to have major defects the total cost would be 2,000,000. But, if all products were to have minor defects the total repairs would only cost 500,000. The appropriate risk-adjustment factor should be 5% for the probability weighted estimated cash flows. How much is the warranty expense for 2020?
- During 2022, ABC 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. The company reported sales of P10,000,000 for 2022 and P12,000,000 for 2023. The actual expenditures for warranties amounted to P300,000 for 2022 and P1,100,000 for 2023. What is the estimated warranty liability on Dec. 31, 2023?In August 2020, Atlantic Corp, commits to selling 100 of its merchandise to Boy Co. for P30,000 (P300 per product). The merchandise is to be delivered to Boy over the next 6 months. After 60 mierchandises were delivered, the contract is modified and Commonio promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Atlantic delivered an additional 90 products. All sales are cash on delivery How much revenue will be recognized on the contract for the year 2020?During 2024, Foxfire Company introduced a new line of machines that carry a three-year warranty against defects. Based on experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales were P1,200,000, P3,000,000 and P4,200,000 for 2024, 2025, and 2026, respectively. Actual warranty expenditures were P18,000, P90,000 and P270,000 for 2024, 2025 and 2026, respectively. What amount should be reported as warranty liability on December 31, 2026?
- SONY Music, Inc. manufactures and sells high-quality musical instruments. All instruments sold come with a warranty where SONY promises to fully refund a customer’s money if any instruments turn out to be unsatisfactory. During the first three months of 2022, SONY sold $10 million worth of instruments, and customers returned instruments worth $5,000 for a refund (which SONY has already paid). The cost of those instruments returned was $2,500. At the end of March 2022, SONY estimates based on past experience that customers will likely return an additional $10,000 of instruments sometime during the next few months. Required: 1. Using the accounting rules governing contingencies, analyze SONY'S situation and determine whether SONY would need to record a liability for its warranty program as of March 31, 2022. Clearly explain your answer by connecting with the steps in the contingency accounting rules. 2. Give the entry(ies) that SONY would make to record the instruments already…Sony introduces a new compact music player to compete with Apple’s iPod that carries a two-year warranty against manufacturer’s defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 3% of sales. By the end of the first year of selling the product, total sales are $31 million, and actual warranty expenditures are $300,000. What amount (if any) should Sony report as a liability at the end of the year?The Moustache Company is replacing most of the windows in its Alden factory by purchasing them under a note agreement with the Blattner Window Design Company on January 1, 2019. Moustache financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2019 and continuing for a total of four more years(final payment December 31, 2023). Blattner will charge Moustache the market interest rate of 10% compounded annually. What is the amount of the 2020 interest expense? A. $3,290,800 B. $2,790,800 C. $4,000,000 D. $3,169,880
