Vera., a dealer of household appliances, sells washing machines at an average price of P8,100. The Company also offers to each customer a separate 3-year warranty contract for P810 that requires the Company to provide periodic maintenance services and to replace defective parts. During 2022, Vera sold 300 washing machines and P270 warranty contracts for cash. The Company estimates that the warranty costs are P180 for parts and P360 for labor. Assume sales occurred on December 2022, Veras policy is to recognize income from the warranties on a straight line basis. In 2023, Vera, incurred actual costs relative to 2022 warranty sales of P18,000 for parts and P36,000 for labor. Q10 – What is the amount of current liability relative to these transactions would appear on the 12/31/2022 SFP? Q11 – What is the amount of non-current liability relative to these transactions would appear on the 12/31/2022 SFP? Q12 – What amount of warranty expense would be shown on the income statement for the year ended December 31, 2023? Q13 – What is the amount of current liability relative to these transactions would appear on the 12/31/2023 SFP? Q14 – What is the amount of non-current liability relative to these transactions would appear on the 12/31/2023 SFP?
Vera., a dealer of household appliances, sells washing machines at an average price of P8,100. The Company also offers to each customer a separate 3-year warranty contract for P810 that requires the Company to provide periodic maintenance services and to replace defective parts. During 2022, Vera sold 300 washing machines and P270 warranty contracts for cash. The Company estimates that the warranty costs are P180 for parts and P360 for labor.
Assume sales occurred on December 2022, Veras policy is to recognize income from the warranties on a straight line basis. In 2023, Vera, incurred actual costs relative to 2022 warranty sales of P18,000 for parts and P36,000 for labor.
Q10 – What is the amount of current liability relative to these transactions would appear on the 12/31/2022 SFP?
Q11 – What is the amount of non-current liability relative to these transactions would appear on the 12/31/2022 SFP?
Q12 – What amount of warranty expense would be shown on the income statement for the year ended December 31, 2023?
Q13 – What is the amount of current liability relative to these transactions would appear on the 12/31/2023 SFP?
Q14 – What is the amount of non-current liability relative to these transactions would appear on the 12/31/2023 SFP?
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