SWO provides a ten-year warranty with all equipment sales. The warranty covers all defects and breakdowns...
SWO provides a ten-year warranty with all equipment sales. The warranty covers all defects and breakdowns that are not directly related to regular wear and tear. Based on the experience, SWO estimates the probability of an equipment making a warranty claim during the next 10 year of coverage is as follows:
Year 1 2 3 4 5 6 7 8 9 10 1% 2% 2% 5% 5% 10% 12% 15% 18% 20%
The average retail value per claim is $100 currently and increases by 3% every year. The average cost of parts and service at SWO is about 60% of the retail value. The effective interest rate is 6%.
***Calculate the PV of warranty
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SWO provides a ten-year warranty with all equipment sales. The
warranty covers all defects and breakdowns...
SWO provides a ten-year warranty with all equipment sales.
SWO provides a ten-year warranty with all equipment sales. The warranty covers all defects and breakdowns that are not directly related to regular wear and tear. Based on the experience, SWO estimates the probability of an equipment making a warranty claim during the next 10 year of coverage is as follows: Year 1 2 3 4 5 6 7 8 9 101%2% 2% 5% 5% 10% 12% 15% 18% 20% The average retail value per claim is $100 currently and increases by...
1. Bolivia provides a warranty with all its products it sells. It estimates that it will...
1.
Bolivia provides a warranty with all its products it sells. It
estimates that it will sell 1,000,000 units of its product for the
year ended December 31, 2020, and that its total revenue for the
product will be $100,000,000. It also estimates that 60% of the
product will have no defects, 30% will have major defects, and 10%
will have minor defects. The cost of a minor defect is estimated to
be $5 for each product sold, and the...
QUESTION 2 The Box Ltd sells electric scooters and provides a one-year warranty (mentioned in the...
QUESTION 2 The Box Ltd sells electric scooters and provides a one-year warranty (mentioned in the contract) for all its products from the time of purchase by offering to repair or replace the item. Based on past experience, it is probable that there will be some claims under the warranties. A present obligation: Does not arise until there is a claim under a warranty. Arises at the time the sale is made to the customer. Arise at the time of...
The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products...
The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2020, and that its total revenue for the product will be $100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be...
8) 8) A company sells its product subject to a warranty that covers the cost of...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale, Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
8) 8) A company sells its product subject to a warranty that covers the cost of...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale. Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
8) 8) A company sells its product subject to a warranty that covers the cost of...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale. Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
Chris's Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn...
Chris's Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn mowers sold. In 2020, Chris sold $325,700 of new specialty mowers for golf greens for which Chris's service department does not have the equipment to do the service. Chris has entered into an agreement with Mower Mavens to provide all warranty service on the special mowers sold in 2020. Chris wishes to measure the fair value of the agreement to determine the warranty liability...
Marin Inc. sells portable computer equipment with a two-year warranty contract that requires the corporation to...
Marin Inc. sells portable computer equipment with a two-year
warranty contract that requires the corporation to replace
defective parts and provide the necessary repair labour. During
2020, the corporation sells for cash 380 computers at a unit price
of $2,550. Ignore any cost of goods sold. Based on experience, the
two-year warranty costs are estimated to be $166 for parts and $189
for labour per unit. (For simplicity, assume that all sales
occurred on December 31, 2020.) The warranty is...
Please explain every single step of answers. wuestion Help Seconds Fried Chicken bought equipment on January...
Please explain every single step of answers.
wuestion Help Seconds Fried Chicken bought equipment on January 2, 2016for $39.000. The equipment was expected to remain in service for four years and to perform 6.600 fry jobs. At the end of the equipment's useful life. Seconds estimates that its residual value will be $6,000The equipment performed 660 jobs the first year, 1980 the second year, 2.640 the third year, and 1,320 the fourth year Requirements 1. Prepare a schedule of depreciation...
1.
Bolivia provides a warranty with all its products it sells. It
estimates that it will sell 1,000,000 units of its product for the
year ended December 31, 2020, and that its total revenue for the
product will be $100,000,000. It also estimates that 60% of the
product will have no defects, 30% will have major defects, and 10%
will have minor defects. The cost of a minor defect is estimated to
be $5 for each product sold, and the...
QUESTION 2 The Box Ltd sells electric scooters and provides a one-year warranty (mentioned in the contract) for all its products from the time of purchase by offering to repair or replace the item. Based on past experience, it is probable that there will be some claims under the warranties. A present obligation: Does not arise until there is a claim under a warranty. Arises at the time the sale is made to the customer. Arise at the time of...
The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2020, and that its total revenue for the product will be $100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale, Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale. Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
8) 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale. Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What...
Chris's Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn mowers sold. In 2020, Chris sold $325,700 of new specialty mowers for golf greens for which Chris's service department does not have the equipment to do the service. Chris has entered into an agreement with Mower Mavens to provide all warranty service on the special mowers sold in 2020. Chris wishes to measure the fair value of the agreement to determine the warranty liability...
Marin Inc. sells portable computer equipment with a two-year
warranty contract that requires the corporation to replace
defective parts and provide the necessary repair labour. During
2020, the corporation sells for cash 380 computers at a unit price
of $2,550. Ignore any cost of goods sold. Based on experience, the
two-year warranty costs are estimated to be $166 for parts and $189
for labour per unit. (For simplicity, assume that all sales
occurred on December 31, 2020.) The warranty is...
Please explain every single step of answers.
wuestion Help Seconds Fried Chicken bought equipment on January 2, 2016for $39.000. The equipment was expected to remain in service for four years and to perform 6.600 fry jobs. At the end of the equipment's useful life. Seconds estimates that its residual value will be $6,000The equipment performed 660 jobs the first year, 1980 the second year, 2.640 the third year, and 1,320 the fourth year Requirements 1. Prepare a schedule of depreciation...
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