ACCOUNTING PRINCIPLES 222 5/16 >C<
2nd Edition
ISBN: 9781323461525
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 11, Problem P11.28APGA
Journalizing liability transactions
The following transactions of Oscar Landing occurred during 2016:
Apr. 30 Landing is party to a patent infringement lawsuit of $220,000. Landing's attorney is certain it is remote that Landing will lose this lawsuit.
Jun. 30 Estimated warranty expense at 2% of sales of $420,000.
Jul. 28 Warranty claims paid in the amount of $5,800.
Sep. 30 Landing is party to a lawsuit for copyright violation of $110,000 Landing's attorney advises that it is probable Landing will lose this lawsuit. The attorney estimates the loss at $110,000
Dec. 31 Landing estimated warranty expense on sales for the second half of the year of $460,000 at 2%.
Requirements
- Journalize required transactions, if any, in Landing’s general journal. Explanations are not required.
- What is the balance in Estimated Warranty Payable assuming a beginning balance of $0?
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Philippines Accounting standard
1. For each of the following situations, which is NOT reported as a
liability on the balance sheet of Bloomington Inc. at December 31,
2016.
A) Bloomington owes $240,000 at year-end 2016 for inventory
purchase.
B) Bloomington agreed to purchase a $30,000 drill press in January
2017 (has not purchased yet).
C) During November and December of 2016, Bloomington sold
products to a customer and warranted them against product failure
for 90 days. Estimated costs of honoring this 90-day warranty during
2017 are $5,100.
D) Bloomington provides a profit-sharing bonus for its executive equal
to 5% of reported pretax annual income. The estimated pretax
income for 2016 is $900,000. Bonuses are not paid until January of
the following year.
Your answer is
Explain your answer:
2. A stockholder has filed a lawsuit against Fischer Corporation.
Fischer's attorneys have reviewed the facts of the case. Their review
revealed that similar lawsuits have never resulted in a cash award
and it is highly…
Chapter 11 Solutions
ACCOUNTING PRINCIPLES 222 5/16 >C<
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