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Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $11,050 $10,595 Noncurrent estimated product warranty payable 6,721 5,924 Total $17,771 $16,519 Assume that Harbour's sales were $130,324 million in current Year and that the total paid on warranty claims during the current year was $11,392 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. fill in the blank d3bc3bf67fec01d_2 fill in the blank d3bc3bf67fec01d_3 fill in the blank d3bc3bf67fec01d_5 fill in the blank d3bc3bf67fec01d_6 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

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 34E

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Accrued Product Warranty

Harbour Company disclosed estimated product warranty payable for comparative years as follows:

	(in millions)
	Current Year	Prior Year
Current estimated product warranty payable	$11,050		$10,595
Noncurrent estimated product warranty payable	6,721		5,924
Total	$17,771		$16,519

Assume that Harbour's sales were $130,324 million in current Year and that the total paid on warranty claims during the current year was $11,392 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.

		fill in the blank d3bc3bf67fec01d_2	fill in the blank d3bc3bf67fec01d_3
		fill in the blank d3bc3bf67fec01d_5	fill in the blank d3bc3bf67fec01d_6

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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