Product Warranties The company also sells wax and leashes to customers. They are trying to decide if they should make an adjustment to the accounts at year end for any potential returns. Advise the owners on what type of journal entry they should include in the accounts at year end.
Q: Review each of the transactions, and prepare any necessary journal entries for each situation.
A: Journal entry: It is a systematic record of a financial transaction of an organization recorded in…
Q: Describe the revenue recognition policy that the company should follow: Comfort Furniture sells…
A: The revenue from sale of goods should be recognised in the books when: Risk and reward of ownership…
Q: You are conducting an audit on your client's revenue cycle for the 2019 financial year. Your client…
A: The auditor is appointed to form an opinion on the financial statement and the auditor before…
Q: Required Information [The following information applies to the questions displayed below.] On…
A: A warranty expense is a cost associated with fixing, replacing, or compensating a customer for any…
Q: On 1st Jan 2020 Suntop LLC has Opening accounts receivable for RO 8000. During the year 2020 amount…
A: The amount of money due to a company for goods or services delivered or utilized but not yet paid…
Q: Lana Appliances sells dishwashers with a fo What is the 2018 warranty expense? (Round your final…
A: Warranties are a written agreement issued by the seller upon products where it is mentioned that the…
Q: Masaya Company is preparing its 2020 financial statement. The accounting period ends on December 31.…
A: Receivables are the current asset for the business.
Q: Warranty Expense: A home improvement store sells lawnmowers and includes a warranty they will be…
A: The amount of warranty expense is recorded in the year of sale of products on the basis of an…
Q: On July 9, Mifflin Company receives an $8,600, 90-day, 12% note from customer Payton Summers as…
A: Journal entry represents the entry where the financial transactions are recorded.
Q: Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note,…
A: Notes receivables are a part of asset which are issued by the corporation for a limited time period…
Q: Please help me by showing your solution in good accounting form. Thank you! A department store…
A: The profits of the company depends upon the sale of the products by the company. The products must…
Q: Dusty Johnson is the accounting and finance manager for a manufacturer. At year-end, he must…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…
Q: Perfect Pet Company gave a creditor a 90-day, 6% note payable for $28,000 on December 1, 2019. What…
A: Principal amount = $ 28000 Coupon rate = 6% Time frame = 1 month period
Q: Masaya Company is preparing its 2020 financial statement. The accounting period ends on December 31.…
A: In this case of we have to determine the amount of total trade and other receivables at December…
Q: A department store sells a television set that was a one- year warranty (quality- assurance) that…
A: As per IFRS 15, There are five steps for the recognition of revenue Identify the contract with a…
Q: XYZ Computers manufactures and sells moblile tokens and radio token systems which include a 180 day…
A: Journal entries: Journal entry records the financial transactions of a business in a journal book.…
Q: Additional information: 1. The company uses a perpetual system 2. The company uses control…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Same Day Surgery Center received a 120-day, 7% note for $96,000, dated April 9 from a customer on…
A: Maturity value of the note = Face value of bonds + Interest
Q: On June 11 of the current year, a retailer sells a trimmer for $400 with a one-year warranty that…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Good Day Service Center received a 120-day, 6% note for $250,000, dated April 12 from a customer on…
A: Calculation of due date of the Note Due Date of Note will be 120 days form the date on which it is…
Q: On the last day of the fiscal year, a co-worker asks you to cut a check for $2,000 as a…
A: Matching Principle is the principle of accounting which states that all the costs relating to the…
Q: Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It…
A: Warranty expense is recorded by company as a liability expense to be made in future.
Q: On August 2, Jun Co. receives a $6,900, 90-day, 11.0% note from customer Ryan Albany as payment on…
A:
Q: Answer all questions. Ch.5-4
A: Please find the whole answer in the picture.
Q: A business issued a 120-day, 6% note for $9,000 to a creditor on account. The company uses a 360-day…
A: Notes payable are defined as the written promissory note or an agreement under which the borrower…
Q: Cardinal Company, a dealer in lawn equipment, accepted a 6 month note receivable from a customer on…
A: Note means an instrument acknowledging as debt due from one party to another party. It carry defined…
Q: compute the amount included in the "Trade and Other Receivable" of the entity's financial position
A: Trade receivables is the money that a company's clients owe it, because the company has made sales…
Q: A car dealership also owns a workshop that it uses for servicing cars under warranty. In preparing…
A: A provision is a liability that needs to be recognized at an expected outflow of resources. A…
Q: Hadley Industries warrants its products for one year. The estimated product warranty expense is 4%…
A: Estimated warranty expenses = Sales x 4% = $210,000 x 4% = $8,400
Q: Warranty expenditures arise when a business sells items and then calculates the number of units and…
A: Estimated warranty liability is a term that refers to the estimation of future responsibility on the…
Q: Note Receivable Prefix Supply Company received a 120-day, 8% note for $450,000, dated April 9 from a…
A: Introduction: A journal entry is a transcript of the a business deal in an organization's accounting…
Q: A credit card company determines a card holder's minimum monthly payment by adding all new interest…
A: Total outstanding principal = $592+$429+$120+$104Total outstanding principal = $1245 Total days till…
Q: Arvan Patel is a customer of Bank's Hardware Store. For Mr. Patel's latest purchase on January 1,…
A: Annual Interest revenue = $490,000*11% Annual Interest revenue = $53,900
Q: Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas…
A: Journal entries refer to the recording of all the monetary events in an organization.
Q: Maas, Incorporated, sells washers and dryers that include a maximum one-year warranty covering…
A: Total estimated warranty liability = 2% * Net sales Total estimated warranty liability = 2% *…
Q: Make the corresponding journal entries to report short-term liabilities. Make the journal entries.…
A: (Note: Entry on 6 May is seems to be repeated by mistake, I am assuming on 6 May payment is made for…
Q: Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the…
A:
Q: Schmitt Company must make computations and adjusting entries for the following independent…
A: Determine total estimated costs:
Q: Uncle Paul's Gifts signs a three-month note payable to help finance increases in inventory for the…
A: Adjusting entries are used to prepare at the end of an accounting period. It helps to ensure the…
Q: A business issued a 120-day, 6% note for $9,000 to a creditor on account. The company uses a 360-day…
A: Notes payable is a negotiable instrument used for differing payments. In this one-party agree to pay…
Q: Sunnyvale Computer Company sells a line of computers that carry a six-month warranty. Customers are…
A: Warranty is the promise made to the buyer of the product by the seller to repair or replace the…
Q: During Year 1, a company accepts the following notes receivable. 1. On April 1, the company provides…
A: Journals are the books of primary entries. The business transactions are recorded at the initial…
Q: Make the journal entries. Make the adjusting entries for each expense accrued at the end of the…
A: Financial transactions are recorded in the form of a journal entries.
Q: Marydale Products permits its customers to defer payment by giving personal notes instead of cash.…
A: Journal is a place where accounting transactions are listed in the book keeping system before ledger…
Q: Hadley Industries warrants its products for one year. The estimated product warranty expense is 4%…
A: Estimated warranty liability = 4% of sales = $210000 x 4%…
Q: Anderson's Accommodating Automobiles sells used cars. In order to incentivize sales, it offers a 3…
A: Adjusting journal entry :- Warranty Liability A/c Dr $1.75 million To Cash…
Q: Warranty Liability: (same info as previously described) A home improvement store sells lawnmowers…
A: The warranty expense is estimated on the basis of sale made during the period.
Product Warranties
The company also sells wax and leashes to customers. They are trying to decide if they should make an adjustment to the accounts at year end for any potential returns. Advise the owners on what type of
Step by step
Solved in 2 steps
- Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.Analyze each situation given below and indicate which type of receivable it produces. (Choose one of the options provided in the drop down menu). - A company paid the salary to one of its employees in advance, at the beginning of the month { notes receivable, other receivable, accounts receivable, no receivable}. - A merchandies company sold goods to a customer abd cash was received one month before the items delivery { notes receivable, other receivable, accounts receivable, no receivable}. - A service company performed a service for a customer and cash was received one week before the service { notes receivable, other receivable, accounts receivable, no receivable}. - A merchandise company sold goods to a customer and cash was received at items delivery { notes receivable, other receivable, accounts receivable, no receivable}. - A service company performed a service for a customer and cash was received immediately after the service { notes receivable, other receivable, accounts…Today is December 30, 2019. In order to capture the attention of online shoppers, Cyber Retail Company had a “Buy Now, Pay Later” sale on Monday, December 2, 2019. The terms of the sale were such that anyone who bought merchandise was required to pay for the merchandise on (or before) February 28, 2020. For any customer who failed to pay by that date, Cyber Retail would “charge” that customer’s purchase to the credit card account that the customer had provided at the time he/she placed the order. Customers purchased $ 5,000,000 of merchandise during the “Buy Now, Pay Later” sale. Cyber estimates that if they waited until February 28, 2020, they would ultimately collect $ 4,800,000 related to this pool of receivables. One component of the difference, estimated at $ 50,000, relates to the “fees” that Cyber Retail would have to pay to the credit card companies upon receiving payment. The other $ 150,000 relates to “lost revenue” resulting from customers whose credit…
- Today is December 30, 2019. In order to capture the attention of online shoppers, Cyber Retail Company had a “Buy Now, Pay Later” sale on Monday, December 2, 2019. The terms of the sale were such that anyone who bought merchandise was required to pay for the merchandise on (or before) February 28, 2020. For any customer who failed to pay by that date, Cyber Retail would “charge” that customer’s purchase to the credit card account that the customer had provided at the time he/she placed the order. Customers purchased $ 5,000,000 of merchandise during the “Buy Now, Pay Later” sale. Cyber estimates that if they waited until February 28, 2020, they would ultimately collect $ 4,800,000 related to this pool of receivables. One component of the difference, estimated at $ 50,000, relates to the “fees” that Cyber Retail would have to pay to the credit card companies upon receiving payment. The other $ 150,000 relates to “lost revenue” resulting from customers whose credit…You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…
- You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance.3.What is the ethical dilemma you face? What are the ethical considerations? Consider your options and responsibilities as assistant controller.4.Identify the key internal and external stakeholders. What are the negative impacts that can happen if you do not follow the instructions of your supervisor?5.What are the…You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…
- Minnie has asked you to review the methods Min Armin Wastege uses when dealing with Accounts Receivable. Minnie has compiled the following information for the past 2 months andwants you to update her records on August 31, 2020.On June 30, 2020 the Account Receivable balance for Min Armin Wastege was $13,585 Dr withan Allowance for Doubtful Debts of $462 Cr. In the last two monthsSales (net of GST)S4 800Sales Returns & Allowances (net of GST) 400Cash Collected3 550Bad Debts to be written off (Including GST) 660The bad debts listed above have not been written off as yet. Minnie has also calculated based on past experience that 7% of net credit sales go bad. All sales are made on credit. REQUIRED:Prepare the following General Journal entries to1. account for the write off of the bad debt during the past two months2. the adjusting entry on August 31 using the information Minnie has provided. b. Update the Accounts Receivable and Allowance for doubtful debts accounts.When should companies that sell gift cards to customersreport revenue?a. When the gift card is issued and cash is received.b. When the gift card is used by the customer.c. At the end of the year in which the gift card is issued.d. None of the above.Conceptual Connection: For each situation, indicate when the company should recognize revenue on an accrual basis. a. A store sells a gift card in December which will be given as a Christmas present. The card is not redeemed until January.
