Warranty liability is an estimate based on past warranty claims. How might a company determine how...
Warranty liability is an estimate based on past warranty claims. How might a company determine how much to accrue for warranty? Why might it change the accrual?
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Warranty liability is an estimate based on past warranty claims.
How might a company determine how...
Betancourt Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experie...
Betancourt Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Betancourt estimates that 4% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $25. The units sold and units defective that occurred during the last 2 months of 2017 are as follows Month Units Sold Units Defective Prior to December 31 November 39,500 790 December 41,500 519...
a) prepare summary journal entries to record warranty expense and warranty claims in 2021 and 2022...
a) prepare summary journal entries to record warranty expense and
warranty claims in 2021 and 2022
b) determine the provision for warranty payable that GGT will
report as a liability on Dec 31 2022
Question 3 Or Jetski Corp. has sold motorized watercraft for a number of years. GOT includes a three-year warranty on each watercraft they sell. Management estimates that the cost of providing the warranty coverage is 2% of sales in the first year and 3% of sales...
What comprises the documentation examined by the auditor (audit legend E)? Supporting the warranty claims and...
What comprises the documentation examined by the auditor (audit
legend E)? Supporting the warranty claims and reserves.
WP 20 Brony's Bikes Estimated Liability for Product Warranty December 31, 20X9 Prepared by: Date: Reviewed by: Date: Account 8330 Warranty Expense VYX9 Audited balance 20x9 Provision for warranty Account 2070 Estimated Liability $860,000 $1,139,000 & $1,139,000 $1,999,000 ($1,455,000) E 20x9 Warranty claims by customers 12/3YX9 Ledger balance $544,000 $1,139,000 Recommended audit adjustment (below) $286,883 $286,883 1213VX9 Audited balance $830,883 $1,425,883 Explanation of...
The balance of the Estimated Warranty Liability account was $12,700 on January 1, 2019, and $17,600...
The balance of the Estimated Warranty Liability account was $12,700 on January 1, 2019, and $17,600 on December 31, 2019. Based on an analysis of warranty claims during the past several years, this year's warranty provision was established at 1.5% of sales, and sales during the year were $1,340,000. Required: What amount of warranty expense will appear on the income statement for the year ended December 31, 2019? What were the actual costs of servicing products under warranty during the...
The balance of the Estimated Warranty Liability account was $12,000 on January 1, 2018, and $13,600...
The balance of the Estimated Warranty Liability account was $12,000 on January 1, 2018, and $13,600 on December 31, 2018. Based on an analysis of warranty claims during the past several years, this year's warranty expense was established at 3% of sales, and sales during the year were $800,000. Required: a. What amount of warranty expense will appear on the income statement for the year ended December 31, 2018? b. What were the actual costs of servicing products under warranty...
Gonzales Co. provides warranties for many of its products. Its estimated warranty liability account had a...
Gonzales Co. provides warranties for many of its products. Its estimated warranty liability account had a balance of $164,800 at January 1, 2017. Based on an analysis of warranty claims during the past several years, the warranty expense for 2017 was established at 0.4 percent of sales. During 2017, the actual cost of servicing products under warranty was $68,400, and sales were $16,400,000. Required: 1. Compute the warranty expense that should appear on the company’s statement of earnings for the...
Problem 10-8B Note payable, warranty expense, and liability L03,4 Page 13 CHECK FIGURE: 3. Warranty expense...
Problem 10-8B Note payable, warranty expense, and liability L03,4 Page 13 CHECK FIGURE: 3. Warranty expense $1,200 Sask Tractor borrowed $320,000 to purchase inventory on September 17, 2020 for 60 days at 6% interest by signing a note. On December 6, 2020, Sask Tractor sold a tractor for cash of $24.000 (cost $15,400) with a two year parts and labour warranty. Based on prior experience, Western expects eventually to incur warranty costs equal to 5% of the selling price. The...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier costing $6,500 with a two-year parts warranty to a customer on August 16, 2018, for $13,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copier requires on-site repairs that are completed the same day. The repairs cost $118 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on experience,...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier costing $5,500 with a two year parts warranty to a customer on August 16, 2018, for $11,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copler requires on-site repairs that are completed the same day. The repairs cost $124 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on...
Cullumber Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience,...
Cullumber Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience, Cullumber estimates that 3% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is NT$13 (amounts in thousands). The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month Units Sold Units Defective Prior to December 31 630 November December 28,000...
Betancourt Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Betancourt estimates that 4% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $25. The units sold and units defective that occurred during the last 2 months of 2017 are as follows Month Units Sold Units Defective Prior to December 31 November 39,500 790 December 41,500 519...
a) prepare summary journal entries to record warranty expense and
warranty claims in 2021 and 2022
b) determine the provision for warranty payable that GGT will
report as a liability on Dec 31 2022
Question 3 Or Jetski Corp. has sold motorized watercraft for a number of years. GOT includes a three-year warranty on each watercraft they sell. Management estimates that the cost of providing the warranty coverage is 2% of sales in the first year and 3% of sales...
What comprises the documentation examined by the auditor (audit
legend E)? Supporting the warranty claims and reserves.
WP 20 Brony's Bikes Estimated Liability for Product Warranty December 31, 20X9 Prepared by: Date: Reviewed by: Date: Account 8330 Warranty Expense VYX9 Audited balance 20x9 Provision for warranty Account 2070 Estimated Liability $860,000 $1,139,000 & $1,139,000 $1,999,000 ($1,455,000) E 20x9 Warranty claims by customers 12/3YX9 Ledger balance $544,000 $1,139,000 Recommended audit adjustment (below) $286,883 $286,883 1213VX9 Audited balance $830,883 $1,425,883 Explanation of...
Problem 10-8B Note payable, warranty expense, and liability L03,4 Page 13 CHECK FIGURE: 3. Warranty expense $1,200 Sask Tractor borrowed $320,000 to purchase inventory on September 17, 2020 for 60 days at 6% interest by signing a note. On December 6, 2020, Sask Tractor sold a tractor for cash of $24.000 (cost $15,400) with a two year parts and labour warranty. Based on prior experience, Western expects eventually to incur warranty costs equal to 5% of the selling price. The...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier costing $6,500 with a two-year parts warranty to a customer on August 16, 2018, for $13,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copier requires on-site repairs that are completed the same day. The repairs cost $118 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on experience,...
Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier costing $5,500 with a two year parts warranty to a customer on August 16, 2018, for $11,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copler requires on-site repairs that are completed the same day. The repairs cost $124 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on...
Cullumber Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience, Cullumber estimates that 3% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is NT$13 (amounts in thousands). The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month Units Sold Units Defective Prior to December 31 630 November December 28,000...
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