INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
3rd Edition
ISBN: 9780136946533
Author: GORDON
Publisher: PEARSON
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Question
Chapter 13, Problem 13.17BE
To determine
To prepare: Journal entries.
Given information:
Sale of power tools is 8,000,000.
Cost of warranty is 6% of sales.
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2. Which of the following best describes the accounting for assurance-type warranty costs? *
1 point
a. Expensed when paid.
b. Expensed when warranty claims are certain.
c. Expensed based on estimate in year of sale.
d. Expensed when incurred.
Questions:
1. What amount of warranty expense would be charge against 2021 revenue?
2. What amount of warranty liability would appear in the December 31, 2021 statement of financial position?
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org).Required:Determine the specific citation for accounting for each of the following items:1. If it is only reasonably possible that a contingent loss will occur, the contingent loss should be disclosed.2. Criteria allowing short-term liabilities expected to be refinanced to be classified as long-term liabilities.3. Accounting for the revenue from separately priced extended warranty contracts.4. The criteria to determine if an employer must accrue a liability for vacation pay
Chapter 13 Solutions
INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
Ch. 13 - Prob. 13.1QCh. 13 - Prob. 13.2QCh. 13 - Prob. 13.3QCh. 13 - Do sellers recognize sales taxes as expenses on...Ch. 13 - Prob. 13.5QCh. 13 - Prob. 13.6QCh. 13 - Prob. 13.7QCh. 13 - What is a gam contingency? Is It accrued and...Ch. 13 - Do firms always accrue and record loss...Ch. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Prob. 13.13QCh. 13 - Prob. 13.14QCh. 13 - Prob. 13.15QCh. 13 - Prob. 13.16QCh. 13 - Prob. 13.1MCCh. 13 - Prob. 13.2MCCh. 13 - Prob. 13.3MCCh. 13 - Medical Services Inc allows employees at the end...Ch. 13 - Trade Notes Payables. On February 1, Seville...Ch. 13 - Unearned Revenues. On June 1 of the current year,...Ch. 13 - Unearned Revenues. GoSnow Inc. provides snow...Ch. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Prob. 13.6BECh. 13 - Sales Taxes Payable. Kloth Fabric Store operates...Ch. 13 - Prob. 13.8BECh. 13 - Prob. 13.9BECh. 13 - Prob. 13.10BECh. 13 - Asset Retirement Obligation at Acquisition. On...Ch. 13 - Prob. 13.12BECh. 13 - Asset Retirement Obligation, Disposal. Buckner...Ch. 13 - Prob. 13.14BECh. 13 - Prob. 13.15BECh. 13 - Prob. 13.16BECh. 13 - Prob. 13.17BECh. 13 - Warranty Liability, Assurance-Type Warranty,...Ch. 13 - Prob. 13.19BECh. 13 - Prob. 13.20BECh. 13 - Trade Notes Payable. On November 1, Barcelona...Ch. 13 - Unearned Revenues. On May 1 of the current year,...Ch. 13 - Gift Cards. Diamond Depot sold 57,000 of gift...Ch. 13 - Sales Taxes Payable. Eaton Technology operates...Ch. 13 - Prob. 13.5ECh. 13 - Asset Retirement Obligation. On January 1,...Ch. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13ECh. 13 - Payroll Taxes Payable, Pay Exceeds. Wage Base....Ch. 13 - Current Operating Liabilities. James Stores, Inc....Ch. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Prob. 13.6PCh. 13 - Prob. 13.7PCh. 13 - Payroll Taxes Payable. Jackson Corporation employs...Ch. 13 - Prob. 1JCCh. 13 - Prob. 2JCCh. 13 - Prob. 3JCCh. 13 - Prob. 1FSCCh. 13 - Surfing the Standards Case 1: Environmental...Ch. 13 - Prob. 2SSCCh. 13 - Prob. 1BCC
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Similar questions
- Required: 1. Prepare journal entries in connection with the warranty using the “expense as incurred” approach.2. Prepare journal entries in connection with the warranty using the “accrual” approach.arrow_forward1. What amount of warranty expense should be shown on Crassula's income statement for the year ended December 31, 2021? 2. What amount of warranty liability should be shown on Crassula's statement of financial position as of December 31, 2021?arrow_forwardThe estimated warranty obligation at the end of the financial year is best described as a A. Uncertain liability OB. Contingent liability O C. Liability O D. Constructive liability OE. Unrecognized liabilityarrow_forward
- Which of the following would most likely be classified as a current liability? a.mortgage payable b.bond payable c.two-year note payable d.unearned rentarrow_forwardWhich of the following will be classified as a current liability? O a. Two-year noțes payable O b. Unearned rent Oc. Bonds payable Od. Mortgage loanarrow_forwardAccess the FASB Accounting Standards Codification at the FASB website ( asc.fasb.org ) Required: Determine the specific citation for accounting for each of the following items: 1. If it is only reasonably possible that a contingent loss will occur, the contingent loss should be disclosed. 2. Criteria allowing short-term liabilities expected to be refinanced to be classified as long-term liabilities. 3. Accounting for the revenue from separately priced extended warranty contracts. 4. The criteria to determine if an employer must accrue a liability for vacation pay.arrow_forward
- A contingent liability is an obligation that depends on the occurrence of a future event and that should be recorded in the accounts: Group of answer choices If the amount is reasonably estimated If the related future event will probably occur The related future event will probably occur and the amount is reasonably estimated. If the amount is due in cash within one yeararrow_forwardRequired:1. Prepare the adjustment to correct the estimated warranty liability on December 31, 2022.arrow_forwardWhich one of the following options is correct for a journal entry creating provision for warranty expenses?Select one:a. Correct option is not listed in hereb. Warranty provision Dr , Warranty expenses Crc. Warranty expenses Dr , Warranty provision Crd. Warranty Expenses Dr, PAYG tax Cr, Warranty Provision Crarrow_forward
- 1. What amount of warranty expense would be charged against 2021 revenue? 2. What amount of warranty liability would appear in the December 31, 2021 statement of financial position?arrow_forwardWhich of the following is an account used in applying the Sales Warranty Approach, but not the Expense Warranty Approach? Select one: O a Estimated liability under warranties Ob. Warranty Expense Oc Unearned Warranty Revenue O d. Prepaid Warranty Expensearrow_forwardWhere is debt callable by the creditor reported on the debtor's financial statements? a) Long term liability b) Current liability if the creditor intends to call the debt within the year , otherwise a long term liability. c) Current liability if it is probable that creditor will call the debt within the year, otherwise a long term liability. d) current liabilityarrow_forward
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