During 2011, Rex Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales are P6,000,000for 2011 and P10,000,000 for 2012. Actual warranty expenditures are P90,000 for 2011 and P300,000 for 2012. On December 31, 2012, what is the estimated warranty liability? * a. 570,000 b. 100,000 c. 450,000 d. 0

Q: Accordingly, the following entries relating to the contingency for warranty costs were recorded…

A: Warranty expenses are the expenses that are incurred with respect to the repair, replacement, or…

Q: During 2005, Cory Company introduced a new line of machines that carry a two-year warranty against…

A: The warranty Expenses is recognized and recorded at the time when the sales are made.

Q: Riverbed Corporation issued a 3-year, $65,000, 7% note to Cullumber Company on January 1, 2017, and…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: In 2015, Quapau Products introduced a new line of hot water heaters that carry a one-year warranty…

A: Change in accounting estimate: A change in accounting estimate is the change in the expected future…

Q: Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with…

A: Definition:   Warranty expense: It is an estimated expense which arises when the company sells the…

Q: During 2014, the company introduced a new product that provides a guarantee for two years in the…

A: Estimated warranty obligation 2015 = $800,000 * 4% + $1,000,000 * 2%…

Q: East Corp. manufactures stereo systems that carry a two-year warranty against defects. Based on past…

A: Income statement is a financial statement which shows all income and expenses of the business and at…

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: During 2017, Blevert Co. introduced a new line of machines that carry a three-year warranty against…

A: Answer is option C) $212,000

Q: In 2010, Payton Corporation began selling a new line of products that carry a two-year warram the…

A: Warranty is a form of assurance being provided by the seller to the buyer that in case product will…

Q: During 2017, Alaa Company sold 600 TV for $500 each. The sold items include a one-year warranty. The…

A: It is the provision created by the company for the repair of defective goods that is return by the…

Q: In 2017, Quapau Products introduced a new line of hot water heaters that carry a one-year warranty…

A: Warranty expenditures need to be recorded in the period of sale as per the matching principle of…

Q: In 2013, Waldo Balloons sold 50 hot air balloons at $25,000 each. The balloons carry a 5-year…

A: Calculate the balance of warranty liability at the end:

Q: During 2011, Rex Company introduced a new product carrying a two-year warranty against defects. The…

A: Warranty is the form of assurance which is being provided by the seller to the customer that in case…

Q: RTY Company sells 6,000 units of its product for $500 each during the year ending December 31, 2017.…

A: Total number of defected units expected for the year 2017 for which warranty claim arises = 6,000…

Q: During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience…

A: Journal entry: A journal entry is used to record day-to-day transactions of the business by debiting…

Q: The following situations relate to Bolivia Company.1. Bolivia provides a warranty with all its…

A: Warranty Liability: Estimated liability is an exact dollar amount of debt or obligation which is…

Q: 10. During 2011, Rex Company introduced a new product carrying a two-year warranty against defects.…

A: Provision is a liability. Liabilities include present obligation that required an outflow of…

Q: Green Company started business in 2020. It sells printers with a three-year warranty. Green…

A: Warranty  expense  is the total warranty  claim for product  =2%+4%+6% =12%

Q: EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all…

A: Net sales = $1,900 Estimated Return =4% Estimated cots as of sale = 30% Note: Beginning accrued…

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: East Corp. manufactures stereo systems that carry a two-year warranty against defects. Based on past…

A: Warranty expense means where the customer has given an option to repair the goods if some defect…

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: During 2016, Namnama Company introduced a new product carrying a two-year warranty against defects.…

A: Warranty expense: It is the estimated cost incurred by a manufacturing company in related to repair…

Q: oodmier Lawn Products introduced a new line of commercial sprinklers in 2020 that carry a one-year…

A: Warranty expense: The amount spent on repairs and maintenance in accordance with the company's…

Q: During 2011, Vien Co. introduced a new line of machines that carry a three-year warranty against…

A: Warranty liability = Total expense recognized - Actual warranty expenditure The question requires…

Q: Modem Appliances, Inc. sells food processors for $150 with a 120-day warranty against defects. Past…

A: A liability for product warranties is accounted to recognize the amount of the repair or replacement…

Q: On January 1, 2011, ACB Inc. gave a loan to XYZ Enterprises amounting to P100,000 and received a two…

A: ABC gave a loan to XYZ enterprise on 01-01-2011 Amount of loan given= P100,000 Interest rate 6% ABC…

Q: Hazel Gird's products come with a one-year warranty. In 2014, sales totaled 2,500 units. It is…

A: As per the accrual method of accounting, the expenditure which is related to a particular year…

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: McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2017, and…

A: Given: Note payable - 40,000 Due period - 4 years Stated interest rate - 5% Market interest rate -…

Q: During 2011, Rex Company introduced a new product carrying a two-year warranty against defects. The…

A: Formula: Estimated warranty liability  amount= Sales amount x Warranty liability %

Q: Riverbed Appliances provides a 3-year warranty with one of its products, which was first sold in…

A: Journal entry:   A journal entry is a systematic record of a financial transaction of a company…

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: Ace Appliances Inc. offers a 12-month warranty on all its appliances. Ace Appliances estimates that…

A: Adjusted Warranty Liability = Average cost per warranty claim * Expected number of appliance require…

Q: on December 1, Concord Company introduces a new product that includes a one-year warranty on parts.…

A: Solution: Estimated warranty cost = 1300 units * 6% * $90 = 1300*6%*90 = $7020

Q: On december 31, 2017, Precious Company sold an equipment with carrying amount of 2,000,000 and…

A: Solution Given Annual payment 500000 Number of years 10 years Note issue date…

Q: Dagupan Company prepares quarterly interim

A: Total warranty = warranty claim% * first quarter scales + second quarter scales = 10% * P 10000000 +…

Q: Pinnacle Co., prepares quarterly interim financial reports. The entity sells electric fans and…

A: Interim financial statements are those statements which cover the period of less than a year and it…

Q: During 2017, Alaa Company sold 600 TV for $500 each. The sold items include a one-year warranty. The…

A: Estimated warranty cost = No. of TV sold x estimated warranty % x cost per TV = 600 x $40 x 5% =…

Q: EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all…

A: Amount payable under Warranty is $26.70 million Computation of amount payable under warranty to…

Q: Oak Co. offers a three-year warranty on its products. Oak previously estimated warranty costs to be…

A: Warranty expense is recognized by applying a pre-determined percentage on the value of sales. This…

Q: During 2008, Luciana Company introduced a new product carrying a two-year warranty against defects.…

A: Answer: 2, 200, 000       Explanation/ Computation:              The warranty liability is a…

Q: SONY Music, Inc. manufactures and sells high-quality musical instruments. All instruments sold come…

A: 1. Determination of whether SONY would need to record liability for its warranty program. Warranty…

Q: Davao Company prepares quarterly interim financial reports. The entity sells electrical goods and…

A: Given data: Sales in the first quarter = P10,000,000 Sales in the second quarter = P15,000,000…

Q: During 2018, Stable Company introduced a new line of product that carry a three-year warranty…

A: The question is based on the concept of Financial Accounting.

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.