P-5*** SAN Company began selling new line of product that carries a one year warranty against defects. Based upon experience the estimated warranty costs related to peso sales is 5%. The selling price per unit of product is P1500. The number of units sold in 2011 and 2012 are 12,000 units and 20,000 units, respectively. Actual warranty expenditures for the year 2011 amounted to P800,000 and in 2012, the warranty expenditures amountedto P1,200,000. 8. At December 31,2011 and December 31,2012 financial statements, how much shall be reported as Accrual approach Expense approach Estimated warranty liability,2011 Warranty expense,2011 Estimated warranty liability,2012
P-5*** SAN Company began selling new line of product that carries a one year warranty against defects. Based upon experience the estimated warranty costs related to peso sales is 5%. The selling price per unit of product is P1500. The number of units sold in 2011 and 2012 are 12,000 units and 20,000 units, respectively. Actual warranty expenditures for the year 2011 amounted to P800,000 and in 2012, the warranty expenditures amountedto P1,200,000. 8. At December 31,2011 and December 31,2012 financial statements, how much shall be reported as Accrual approach Expense approach Estimated warranty liability,2011 Warranty expense,2011 Estimated warranty liability,2012
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.11E
Related questions
Question
Transcribed Image Text:P-5*** SAN Company began selling new line of product that carries a one year warranty against defects.
Based upon experience the estimated warranty costs related to peso sales is 5%. The selling price per
unit of product is P1500. The number of units sold in 2011 and 2012 are 12,000 units and 20,000 units,
respectively. Actual warranty expenditures for the year 2011 amounted to P800,000 and in 2012, the
warranty expenditures amountedto P1,200,000.
8. At December 31,2011 and December 31,2012 financial statements, how much shall be reported as
Accrual approach
Expense approach
Estimated warranty liability,2011
Warranty expense,2011
Estimated warranty liability.2012
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning