1. Determine the estimated warranty liability on December 31, 2022. 2. Analyze the estimated warranty liability account to ascertain if adjustment is necessary. The sales and warranty repairs are made evenly during the year.
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1. Determine the estimated warranty liability on December 31, 2022.
2. Analyze the estimated warranty liability account to ascertain if adjustment is necessary. The sales and warranty repairs are made evenly during the year.
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- Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?In 2020, Dare Company began selling a new calculator that carried a two-year warranty against defects. The entity projected the estimated warranty cost as a percent of sales. First year of warranty 4% Second year of warranty 10% Sales and actual warranty repairs were: 2020 2021 Sales 5,000,000 9,000,000 Actual warranty repairs 200,000 560,000 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. 3. Determine the estimated warranty liability on December 31, 2021.In 2018, Bare company began selling a new calculator that carried a two-year warranty against defects. Bare projected the estimated warranty (as a percent of sales) as follows: First year of warranty 4% Second year of warranty 10% Sales and actual warranty repairs were: 2018 2019 Sales 5,000,000 9,000,000 Actual warranty repairs 200,000 560,000 How much is the amount of estimated liability for warranties on December 31, 2018?
- In 2020, Pluto Company started selling new computer that carried a 2-year warranty against defects. Based on the manufacturer's recommendations, the entity estimated warranty cost as a percentage of sales.First year of warranty - 3%Second year of warranty - 9% 2020 2021 Sales 5,000,000 7,000,000 Actual warranty repairs 100,000 250,000 Prepare the necessary journal entries to record this transaction, using the expense as incurred approach, for the years 2020 and 2021.In 2020, KD Corporation began selling a new line of products that carry a two-year warranty against defects.Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows:First year of warranty 2%Second year of warranty 5%Sales and actual warranty expenditures for 2020 and 2021 are presented below: 2020 2021Sales P900,000 P1,200,000Actual warranty expenditures 30,000 60,000What is the estimated warranty liability at the end of 2021?a. P87,000 b. P24,000 c. P57,000 d. P147,000In 2019, Caramel Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows: First year of warranty 5% Second year of warranty 9% Sales and actual warranty expenditures for 2019 and 2020 are presented below: 2019 2020 Sales P3,000,000 P4,000,000 Actual warranty expenditures 100,000 250,000 Using the accrual method, what amount should Caramel report as a liability…
- In 2020, Dare Company began selling a new calculator that carried a two-year warranty against defects. The entity projected the estimated warranty cost as a percent of sales. First year of warranty 4% Second year of warranty 10% Sales and actual warranty repairs were: 2020 2021 Sales 5,000,000 9,000,000 Actual warranty repairs 200,000 560,000 Required: 1. Analyze the estimated warranty liability on December 31, 2022 to ascertain if adjustment is necessary. The sales and warranty repairs are made evenly during the year. 2.Prepare the adjustment to correct the estimated warranty liability on December 31,2022During 2019, Angel Co. introduced a new line of appliances that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales Actual Warranty Expenditures2019 P 400,000 P 6,0002020 1,000,000 30,0002021 1,400,000 90,000 P2,800,000 P126,000 assume that sales and repairs occurs evenly through-out the year, how much is the estimated warranty liability at December 31, 2021?In 2019, Shiftry Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows: First year of warranty 2% Second year of warranty 5% Sales and actual expenditures for 2019 and 2020 are presented below: 2019 2020 Sales 450,000 600,000 Actual warranty expenditures 15,000 30,000 What is the estimated warranty liability at the end of 2020?
- Use the information for the next four (4) questions. In 2020, Pluto Company started selling new computer that carried a 2-year warranty against defects. Based on the manufacturer's recommendations, the entity estimated warranty cost as a percentage of sales. The sales and warranty repairs are made evenly during the year. First year of warranty 3% Second year of warranty 9% Sales and actual warranty repairs are as follows: 2020 2021 Sales 7,500,000 10,500,000 Actual warranty repairs 150,000 375,000 What is the warranty expense for 2020? What is the warranty expense for 2021? What is the warranty liability on December 31, 2021 before adjustment? What is the warranty liability on December 31, 2021 after adjustment?During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2021 and 2022 are as follows: Sales Actual Warranty Expenditures 2021 P 800,000 P12,000 2022 1,000,000 30,000 P1,800,000 P42,000 At December 31, 2022, Eaton should report an estimated warranty liability ofIn 2018, Dubious company began selling new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows: First year of warranty 2% 2nd year of warranty 5% Sales and actual warranty expenditures are presented below: 2018 2019 Sales 5,000,000 7,000,000 Actual warranty costs 100,000 300,000 What is the estimated warranty liability on Dec. 31, 2019?
