LIhe tollowing intormation applies to the questions displayed below. On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $90. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 70 razors for $6, 300 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $18,900 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 140 razors for $12, 600 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Jan. Problem 9-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance < Piev 14 15 of 15 Next >

LIhe tollowing intormation applies to the questions displayed below. On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $90. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 70 razors for $6, 300 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $18,900 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 140 razors for $12, 600 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Jan. Problem 9-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance < Piev 14 15 of 15 Next >

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 56BE

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On November 10, 2020, Singh Electronics began to buy and resell scanners for $58 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $38. Singh estimates warranty costs based on 16% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST): 2020 Nov. 15 Sold 2,500 scanners for $145,000 cash. 30 Recognized warranty expense for November with an adjusting entry. Dec. 8 Replaced 180 scanners that were returned under the warranty. 15 Sold 5,500 scanners. 29 Replaced 46 scanners that were returned under the warranty. 31 Recognized warranty expense for December with an adjusting entry. 2021 Jan. 14 Sold 275 scanners. 20…
On November 10, 2020, Singh Electronics began to buy and resell scanners for $60 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $40. Singh estimates warranty costs based on 15% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST): 2020 Nov. 15 Sold 2,500 scanners for $150,000 cash. 30 Recognized warranty expense for November with an adjusting entry. Dec. 8 Replaced 200 scanners that were returned under the warranty. 15 Sold 6,000 scanners. 29 Replaced 50 scanners that were returned under the warranty. 31 Recognized warranty expense for December with an adjusting entry. 2021 Jan. 14 Sold 300 scanners. 20…
On November 10, 2020, Singh Electronics began to buy and resell scanners for $60 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $40. Singh estimates warranty costs based on 15% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST): 2020 Nov. 15 Sold 2,500 scanners for $150,000 cash. 30 Recognized warranty expense for November with an adjusting entry. Dec. 8 Replaced 200 scanners that were returned under the warranty. 15 Sold 6,000 scanners. 29 Replaced 50 scanners that were returned under the warranty. 31 Recognized warranty expense for December with an adjusting entry. 2021 Jan. 14 Sold 300 scanners. 20…
On November 10, 2020, Singh Electronics began to buy and resell scanners for $54 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $34. Singh estimates warranty costs based on 15% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST):
On December 1, XYZ Limited introduces a new product that includes a one-year warranty on parts. In November, 1000 units are sold. Management believes that 15% of the units will be defective and that the average warranty costs will be $50 per unit. Prepare the adjusting entry at November 30 to accrue the estimated warranty cost.
On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $16,800 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $11,200 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to…
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