During 2020, Ward Company introduced a new product carrying a three-year warranty against defects, which has a separate purchase price. The company collected $18,000, and $27,000 for this extended warranty feature in the years 2020 and 2021, respectively. The company uses straight-line recognition of warranty revenue. For simplification, assume that sales occurred at the first of the year. Sales and actual warranty expenditures for the years ended December 31, 2020, and 2021 are: Sales Actual warranty expenditures 2020 $600,000 $9,000 2021 1,000,000 30,000 Required: 1. The amount of warranty revenue that Ward Company would recognize in 2022 is $ 2. The amount of warrant liability that Ward Company would report in its 2022 balance sheet is $ Note: Don't round until the final answer. Round the final answer to the nearest dollar. Keep two decimals for a percentage.

During 2020, Ward Company introduced a new product carrying a three-year warranty against defects, which has a separate purchase price. The company collected $18,000, and $27,000 for this extended warranty feature in the years 2020 and 2021, respectively. The company uses straight-line recognition of warranty revenue. For simplification, assume that sales occurred at the first of the year. Sales and actual warranty expenditures for the years ended December 31, 2020, and 2021 are: Sales Actual warranty expenditures 2020 $600,000 $9,000 2021 1,000,000 30,000 Required: 1. The amount of warranty revenue that Ward Company would recognize in 2022 is $ 2. The amount of warrant liability that Ward Company would report in its 2022 balance sheet is $ Note: Don't round until the final answer. Round the final answer to the nearest dollar. Keep two decimals for a percentage.

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

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