Warranty Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows: 1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty. 2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction. To determine: whether C must follow his boss’s suggestion or not.

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Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

(2)

To determine

To explain: The ethical dilemma

3.

To determine

the parties who will be affected when suggestion is followed.

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Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

(2)

To determine

To explain: The ethical dilemma

3.

To determine

the parties who will be affected when suggestion is followed.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

(2)

To determine

To explain: The ethical dilemma

3.

To determine

the parties who will be affected when suggestion is followed.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

(2)

To determine

To explain: The ethical dilemma

3.

To determine

the parties who will be affected when suggestion is followed.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

(2)

To determine

To explain: The ethical dilemma

3.

To determine

the parties who will be affected when suggestion is followed.

Answer 6

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

Answer 7

Chapter 13, Problem 13.14BYP

(1)

To determine

Warranty

Warranty is assurance provided to a customer by a seller. It is provided against the probable defects that might occur in a product. Warranty for a product is recognized at the time of sale being made. When warranties and guarantees are considered, contingent liability becomes accrued. Here, estimated warranty is a liability and is credited as there is an increase in liability. Warranty expense is debited as there is increase in the expense incurred. There are two types of warranty. They are as follows:

1. Manufacturer’s warranty is the assurance given to buyer from seller at the time of purchase. It is a part of product package. On the other hand, extended warranty is the assurance given beyond the manufacturer’s original warranty.

2. Extended warranty is that warranty that are sold and priced separately. These warranty are identified as separate performance obligation and thus, recorded as a separate sales transaction.

To determine: whether C must follow his boss’s suggestion or not.

Answer 8

(2)

To determine

To explain: The ethical dilemma

Answer 9

(2)

To determine

To explain: The ethical dilemma

Answer 10

3.

To determine

the parties who will be affected when suggestion is followed.

Answer 11

3.

To determine

the parties who will be affected when suggestion is followed.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 13 - What are the essential characteristics of...Ch. 13 - Prob. 13.2Q Ch. 13 - Bronson Distributors owes a supplier 100,000 on...Ch. 13 - Bank loans often are arranged under existing lines...Ch. 13 - Prob. 13.5Q Ch. 13 - Prob. 13.6Q Ch. 13 - Salaries of 5,000 have been earned by employees by...Ch. 13 - Prob. 13.8Q Ch. 13 - Prob. 13.9Q Ch. 13 - Prob. 13.10Q

Solution Summary: The author explains the two types of warranty. Manufacturer's warranty is the assurance given to buyer from seller at the time of purchase.

To explain: The ethical dilemma

the parties who will be affected when suggestion is followed.

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Chapter 13 Solutions