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The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,500. During this period, a customer returned a product that cost $1,125 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is...
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The Wolf Appliance Co. provides a 120-day parts-and-labor warranty on all merchandise it sells. Wolf estimates the warranty expense for the current period to be $1,230. During the period a customer returned a product that cost $923 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase, a - for decrease, and NA for not affected. In the Cash Flow...
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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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Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 4% of sales. By the end of the first year, sales are $900,000. Actual warranty expenses incurred so far are $13,000. 1. Does this situation represent a contingent liability? OYes No 2. & 3. Record the appropriate journal entries for the warranties. (If no entry is required for a particular transaction/event,...
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Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience the company expects warranty costs to be approximately 5% of sales. By the end of the first year, sales are $800,000. Actual warranty expenses incurred so far are $13,000 1. Does this situation represent a contingent liability? O Yes O No 2 & 3. Record the appropriate journal entries for the warranties. (If no entry is required for a...
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Warranties Polar Company manufactures and sells Ice Machines Polar provides all customers with a two-year warranty guaranteeing to repair, free of charge, any defects reported during this time period. During the year, it sold 100,000 Ice Machines for $295 each. Analysis of past warranty records indicates that 12% of all sales will be returned for repair within the warranty period. Polar expects to incur expenditures of 16 to repair each le Machine. The account Estimated Liability for Warranties had a...
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Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill $33,600 39,600 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Liab. Rev. Exp. Net Inc. Cash Flow + Assets Patent NA Cash 85,600 + Goodwill NA Equity 85,600 NA NA NA NA NA Required: a. Compute the annual amortization expense for...
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Exercise 11-05 a-c Sheridan Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Sheridan 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 $15. The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month November December Units Sold 31,200 33,200 Units Defective Prior to December...
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PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 13-24 (Algo) Warranty expense; change in estimate [LO13-5, 13-6] Woodmier Lawn Products Introduced a new line of commercial sprinklers in 2020 that carry a one-year warranty agalnst manufacturer's defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experlence of others In the Industry. Based on that experlence, warranty costs were expected to approximate 2% of...
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Kingbird Company sells a machine for $6,840 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 620 machines in 2017 (warranty expense is incurred half in 2017 and half in 2018). As a result of product testing, the company estimates that the warranty cost is $384 per machine ($170 parts and $214...
The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,500. During this period, a customer returned a product that cost $1,125 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is...
The Wolf Appliance Co. provides a 120-day parts-and-labor warranty on all merchandise it sells. Wolf estimates the warranty expense for the current period to be $1,230. During the period a customer returned a product that cost $923 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase, a - for decrease, and NA for not affected. In the Cash Flow...
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...
Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 4% of sales. By the end of the first year, sales are $900,000. Actual warranty expenses incurred so far are $13,000. 1. Does this situation represent a contingent liability? OYes No 2. & 3. Record the appropriate journal entries for the warranties. (If no entry is required for a particular transaction/event,...
Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience the company expects warranty costs to be approximately 5% of sales. By the end of the first year, sales are $800,000. Actual warranty expenses incurred so far are $13,000 1. Does this situation represent a contingent liability? O Yes O No 2 & 3. Record the appropriate journal entries for the warranties. (If no entry is required for a...
Warranties Polar Company manufactures and sells Ice Machines Polar provides all customers with a two-year warranty guaranteeing to repair, free of charge, any defects reported during this time period. During the year, it sold 100,000 Ice Machines for $295 each. Analysis of past warranty records indicates that 12% of all sales will be returned for repair within the warranty period. Polar expects to incur expenditures of 16 to repair each le Machine. The account Estimated Liability for Warranties had a...
Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill $33,600 39,600 Dynamo's financial condition just prior to the acquisition of these assets is shown in the following statements model: Liab. Rev. Exp. Net Inc. Cash Flow + Assets Patent NA Cash 85,600 + Goodwill NA Equity 85,600 NA NA NA NA NA Required: a. Compute the annual amortization expense for...
Exercise 11-05 a-c Sheridan Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Sheridan 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 $15. The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month November December Units Sold 31,200 33,200 Units Defective Prior to December...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 13-24 (Algo) Warranty expense; change in estimate [LO13-5, 13-6] Woodmier Lawn Products Introduced a new line of commercial sprinklers in 2020 that carry a one-year warranty agalnst manufacturer's defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experlence of others In the Industry. Based on that experlence, warranty costs were expected to approximate 2% of...
Kingbird Company sells a machine for $6,840 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 620 machines in 2017 (warranty expense is incurred half in 2017 and half in 2018). As a result of product testing, the company estimates that the warranty cost is $384 per machine ($170 parts and $214...