What amount should be reported as the warranty liability for 2021 and 2022, respectively?* a. 20,000 and 170,000b. 170,000 and 650,000c. 500,000 and 650,000d. 500,000 and 170,000 The selling price of Maning-Mani Appliances Company's unit isPhp10,000 each. The buyers are provided with a 2-year warrantythat is expected to cost the company Php1,000 per unit in theyear of sale and Php2,000 per unit in the year following the saleThe company sold 400 units in 2021 and 250 units in 2022.Based on company estimates, 20% of the units sold are repairedin the first year and 40% in the second year. Payments for warrantyrepairs were Php220,000 and Php300,000 in 2021 and 2022,respectively.

Warranty liability is a provision made by companies for expected expenses of warranty claims by…

Answered: The selling price of Maning-Mani…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 63P

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On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?
During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of cocoa beans at 1.00 per pound, delivery to be made in the spring of 2020. Because a record harvest is predicted for 2020, the price per pound for cocoa beans had fallen to 0.80 by December 31, 2019. Of the following journal entries, the one that would properly reflect in 2019 the effect of the commitment of R Corp. to purchase the 100,000 pounds of cocoa is:
The selling price of the Appliances Company's units is P 80,000 each. The buyers are provided with a 2-year warranty that is expected to cost the company are provided with a 2-year warranty that is expected to cost the company P 2,000 per unit in the year of sale and P 6,000 per unit in the year following the sale. The company sold 80 units in2019 and 100 units in the 2020. Actual payments for warranty claims were P 80,000 and P 520,000 in 2019 and 2020, respectively. How much be the warranty expense for 2019 and 2020 respectively? * A.P 200,000 and P 600,000 B P 640,000 and P 800,000 C P 800,000 and P 840,000 D P 680,000 and P 280,000
In August 2020, Atlantic Corp, commits to selling 100 of its merchandise to Boy Co. for P30,000 (P300 per product). The merchandise is to be delivered to Boy over the next 6 months. After 60 mierchandises were delivered, the contract is modified and Commonio promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Atlantic delivered an additional 90 products. All sales are cash on delivery Assume that the additional terms anpective modification to the original contract. How much revenue will be recognized on the contract for the year 2020?
Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor. 1. The amount reported as warranty expense in 2021 is2. The amount reported under Estimated warranty obligation is
In August 2020, Atlantic Corp, commits to selling 100 of its merchandise to Boy Co. for P30,000 (P300 per product). The merchandise is to be delivered to Boy over the next 6 months. After 60 mierchandises were delivered, the contract is modified and Commonio promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Atlantic delivered an additional 90 products. All sales are cash on delivery How much revenue will be recognized on the contract for the year 2020?

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