Harbour Company disclosed estimated product warranty payable for comparative years as follows:   (in millions)   Current Year Prior Year Current estimated product warranty payable $11,201   $10,739   Noncurrent estimated product warranty payable 6,813   6,004   Total $18,014   $16,743   Assume that Harbour's sales were $132,098 million in current Year and that the total paid on warranty claims during the current year was $11,547 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. If an amount box does not require an entry, leave it blank.   Product Warranty Expense        Product Warranty Payable      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
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  1. Harbour Company disclosed estimated product warranty payable for comparative years as follows:

      (in millions)
      Current Year Prior Year
    Current estimated product warranty payable $11,201   $10,739  
    Noncurrent estimated product warranty payable 6,813   6,004  
    Total $18,014   $16,743  

    Assume that Harbour's sales were $132,098 million in current Year and that the total paid on warranty claims during the current year was $11,547 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. If an amount box does not require an entry, leave it blank.

      Product Warranty Expense     
      Product Warranty Payable     

    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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