This is Lemon Company's first year of business and it sells smart phones for $400 that cost $200. They come with a lifetime warranty and average repair cost is $70. Lemon has made $8,900,000 in sales this year and 12,250 units have been returned. Lemon estimates that 3% of units will fail. The year-end balance sheet should show a liability for warranty of: Multiple Choice $500,000 $700,000 $800,000 Some other amount $600,000
Q: In a lease that is recorded as a sales-type lease by the lessor, interest revenue should be recogn...
A: Solution: Under sales-type lease, the lessor recognized sales revenue once asset is given on lease. ...
Q: 28. A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The...
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in...
Q: What is the main difference between debt and equity
A: Debt basically refers to the liability that the organization take to run their business activities s...
Q: Cash $ 14,890 Cash withdrawals by owner $ 930 Accounts receivable 12,820 Consulting revenue ...
A: The balance sheet shows the financial position of the company which includes the assets, liabilities...
Q: Accounting The following cash, credit stock purchases and returns were made RMIT Bookstore during Ju...
A:
Q: Lights Incorporated calculates cost for an equivalent unit of production using the weighted-average ...
A: Under weighted average method, equivalent units is calculated basis closing WIP and transferred unit...
Q: Noel Stewart has estimated that the total fixed costs for his department are £10,000.He also estimat...
A: The various costs incurred in the production are categorised as fixed and variable costs. The cost p...
Q: A home office ships merchandise to the branch at 30% above cost. The allowance for overvaluation at...
A: Net Income: Total revenue less all other expenditures and costs (including any other income and reve...
Q: Prepare the general journal for the above transactions. Narrations ares required.
A: Journal Entries for the month of July 2022 Date Particulars L.F Debit $ Credit $ 05-Jul Cash A/...
Q: Thomson Company makes small metal containers. The company began December with 250 containers in proc...
A: Equivalent units for conversion costs (weighted average method) = No. of units Completed + (Ending w...
Q: Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of it...
A: The differential analysis is performed when two alternatives are available with the organisation.
Q: Analysis of Adjusting Entry for Supplies Analyze each situation and indicate the correct dollar amou...
A: Adjusting entries are those entries which are made at the end of period to match the income and expe...
Q: 25.The current ratio is an example of a Liquidity ratio Group of answer choices True False
A: Current Ratio is a financial ratio that indicates ability of the entity to settle it's short-term ob...
Q: Don Johnson is the management accountant for Cari-Blocks (CB), which manufactures specialty blocks....
A: Solution Manufacturing cost is the sum of costs of all resources consumed in the process of making a...
Q: All cash available, except the amount withheld for future expenses, is distributed at the end of eac...
A: Realisation A/c Date Particulars Date Particulars Amount Jan To Assets 46000 Jan...
Q: Exclusive Souvenirs Hut does customize, hand-crafted memorabilia for hotels, in which each batch of ...
A: The predetermined overhead rate is calculated as estimated overhead cost divided by estimated base a...
Q: The main difference between the net income reported in the separate income statement of the branch a...
A: As per the question, net income is reported in the separate income stat...
Q: National Inc. has been hit hard due to pandemic. The company’s analysts predict that earnings and d...
A: Answer) Formula: Price of share today = Next Expected Dividend/ (Cost of Equity – Growth rate) C...
Q: Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold to th...
A: A manufacturing overhead cost variance refers to the difference between the cost budgeted during the...
Q: Question 9 On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contribut...
A: Statement of Owner’s Equity is prepared to calculate the changes in the owner’s capital during the p...
Q: An entity sells car's spare parts to ZZZ Car Repair during 2020. The entity offers rebates of 3% on ...
A: As per the given condition, if the overall purchase of the year exceeds $ 120000 then rebate will be...
Q: 2- What is the different between Account payable and Account receivable?
A: Accounts payable (AP) are money due by a company to its vendors, whereas accounts receivable are fun...
Q: October November December Budgeted S&A Expenses Salary Expense 26,000 26,500 13,500 10,000 27,000 13...
A: Cash paid for Sales commission = Sales commission expense of prior month x 100% Cash paid for Utilit...
Q: The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. T...
A: Depreciation expense is not paid in cash. So the depreciation of $3,750 will not be included in the ...
Q: West Company is a print shop that produces jobs to customer specifications. During January, Job #305...
A: Direct labor cost = 15 hours x P7 = P105 Overhead cost = 6 MHrs x P18 = P108
Q: Based on the following information, which of the following is closest to days' sales outstanding? •R...
A: Formula: Days sales outstanding = ( Accounts receivable / Revenues ) x 365 days
Q: Data for Al-Riyadh Company for the year ending in 2020: (10 Marks) Date Explanation Beginning Invent...
A: * As per Bartleby policy, in case question contains multiple subparts then answer first three only. ...
Q: The following information relates to Automative Services on 30 June 2021. Vehicles 135,000 160,000 7...
A: Automative Services Balance Sheet At June 30, 2021 Assets Current Assets Cash at Bank ...
Q: Company X has two products: Product A and product B. Product A has a higher selling price but a lowe...
A: Solution Concept If a product line has high selling price but a lower contribution margin it implies...
Q: Rovinsky Corporation, a company that produces and sells a single product, has provided its contribut...
A: In this question, we will calculate net operating income of Rovinsky Corporation, a company that pro...
Q: On January 1, 2022 an SME acquired 25% of the equity of each of entities A and B for P1,000,000 and ...
A: Excel formulas which are used to calculate the carrying amount of investments.
Q: A home office ships merchandise to the branch at 30% above cost. The allowance for overvaluation at...
A: Head office means from where the company mainly operate and all branches are controlled from that po...
Q: P Company purchased 60% of S Company on January 2, 2019 for P3,930,000 when S's book value was P6,30...
A: Non-controlling interest is the portion of the subsidiary which is not owned by the parent company. ...
Q: Teal Company, a major retailer of bicycles and accessories, operates several stores and is a publicl...
A: The financial statements are prepared on accrual basis hence we need to convert it into cash basis t...
Q: Last period Hartig Corporation sold 40,000 units, total sales were $303.000, total variable expenses...
A: Formula: Contribution margin ratio = Contribution margin / Sales value
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: In this question, we have to solve different cases 1. Cost of Equity 2. Cost of debt 3. WACC
Q: LOWE'S Balance Sheets (in millions) Fiscal 2013 Fiscal 2012 Amount Percent Amount Percent Assets Cur...
A: Price/Earning Ratio = Share Price/Earnings per share Generally, the Market price per share is taken ...
Q: Suppose that products A, B, Cnd D have price elasticity of demand coefficients of 0.67, 1.24, 2.01 a...
A: Price elasticity is a measure of responsiveness of a product to its price rise. If the price is incr...
Q: Required: 1. Determine each partner’s share if the first-year profit was $438,000. 2. Independent of...
A: Partner share in the partnership income is the share of income out from the profits as per the terms...
Q: Bulldogs Inc. currently has earnings before interest and taxes of P3,000,000, a degree of combined l...
A: Expected earnings before interest and taxes = Current Earnings before interest and taxes - (Current ...
Q: ntribution ced expens IS
A: Given: Sales=$400,000 Variable expenses=$280,000 Contribution margin=$120,000 Fixed expenses=100,000...
Q: Noel Stewart has estimated that the total fixed costs for his department are £10,000.He also estimat...
A: Formula: Fixed cost per unit = Total fixed cost / Number of units produced
Q: Explain in detail with examples of different methods for cash transactions, and the costs associated...
A: Accounting on a cash basis: When transactions are done in cash, the cash basis of accounting is util...
Q: A company reported the following data: • Sales price per unit: $10 • Fixed cost per month: $20,000 •...
A: Formula: Contribution margin = Sales price - variable cost
Q: ABC Company has sales of $500,000, COGS of $250,000, operating expenses of $200,000, net income of $...
A: Formula: Times interest ratio = Operating income / Interest expense
Q: Entries for Selected Corporate Transactions Morrow Enterprises Inc. manufactures bathroom fixture...
A: Stockholder's Equity - Stockholder' Equity includes Common Stock, Preferred Stock, Paid in Capital i...
Q: The Bulldogs Inc.’s stock price is believe to decline from its current level of P125 anytime during ...
A: The correct answer for the above mentioned question is given in the following steps for your referen...
Q: d manufacturing cost per output unit $160.00 The denominator level for total manufacturing overhead ...
A: Note: As per our guidelines only the first three subparts will be solved 1. Particulars Per un...
Q: Using th we erage me Data for July: work-in-process inventory, July 1 (36,000 units): Direct materia...
A: Equivalent unit for production
Q: ABC Company has sales of $500,000, COGS of $250,000, operating expenses of $200,000, net income of $...
A:
Step by step
Solved in 2 steps
- Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
- Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.Jonus Bike Inc., manufactures and sells high-end bicycles. Each bicycle that the company sells comes with a 5 year unlimited warranty. Based on past experience, Jonus' accountant estimates that for every $3,000 worth of sales, Jonus will have to pay out $78 in warranty costs. Do not enter dollar signs or commas in the input boxes.a) This year, Jonus Bike Inc. had sales of $1,080,000. First, calculate the estimated warranty costs based on the accountant's analysis. Date Account Title and Explanation Debit Credit Dec 31 Answer Answer Answer Answer Record warranty liability b) As part of the warranty program, Jonus had to make repairs to the seat post of 21 bicycles that he sold. Jonus spent $1,390 cash. Prepare the journal entry to record this transaction. Date Account Title and Explanation Debit Credit Dec 31 Answer Answer Answer Answer Record warranty repairs
- In 2013, Waldo Balloons sold 50 hot air balloons at $25,000 each. The balloons carry a 5-year warranty for defects. Waldo estimates that repair costs will average 3% of the total selling price. The estimated warranty liability at the beginning of the year was $40,000. Claims of $15,000 were actually incurred during the year to honor their warranties. Required: What was the balance in the warranty liability account at the end of the year?$Charm Company sells 1,000 units of radio sets at P9,000 each for cash. Each radio set is under warranty for one year and the company has estimated from past experience that warranty cost will probably average P500 per unit and that only 60% of the units sold will be returned for repairs. During the year, actual payment incurred for repairs is P180,000. What amount would be recorded as estimated warranty liability at the end of the year? 300,000 480,000 180,000 120,000Lastly, can you show me how to do this one? 22. In 2018, XYZ, Inc. sold 2,000 beds for $50 each. The beds carry a 2-year warranty for repairs. XYZ estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the beds during 2018? Assets = Liabilities + Stockholders’ Equity Revenues – Expenses = Net Income
- Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year?Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year? fill in the blank 1During the current year, Gardner Home Center sold 800 power washers for $350 each. The power washers carry a 2-year warranty for repairs. Estimates indicate that repair costs will average 2% of sales. How much warranty expense should be accrued at the end of the current year as a result of the sales of this product? a.$8,400 b.$5,600 c.$2,800 d.No liability should be recorded until units are brought in for repairs.