Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor. 1. The amount reported as warranty expense in 2021 is 2. The amount reported under Estimated warranty obligation is
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Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor.
1. The amount reported as warranty expense in 2021 is
2. The amount reported under Estimated warranty obligation is
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- Blossom Equipment Company sells computers for $1,540 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Blossom incurred actual warranty costs relative to 2020 computer sales of $12,000 for parts and $18,000 for labor. (a) Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record sale of computers) 2020 (To record liability against warranty costs) 2021Blossom Equipment Company sells computers for $1,540 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Blossom incurred actual warranty costs relative to 2020 computer sales of $12,000 for parts and $18,000 for labor. (a) Your answer has been saved. See score details after the due date. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 Accounts Receivable 1432200 Sales Revenue 1432200 (To record sale of computers) 2020 Warranty Expense 93000 Warranty…FORD, INC., a dealer of household appliances, sells washing machines at an average price of P8,100. The company also offers to each customer a separate 3-year warranty contract for P810 that requires the company to provide periodic maintenance services and to replace defective parts. During 2019, FORD sold 300 washing machines and 270 warranty contracts for cash. The company estimates that the warranty costs are P180 for parts and P360 for labor. Assume sales occurred on December 31, 2019. FORDS’s policy is to recognize income from the warranties on a straight-line basis. In 2020, FORD incurred actual costs relative to 2019 warranty sales of P18,000 for parts and P36,000 for labor. What liability relative to the 2019 warranties would appear on the December 31, 2020, statement of financial position and how would it be classified? Current Noncurrent Group of answer choices P145,800 P 0 P72,900 P145,800 P72,900 P72,900 P145,800 P72,900
- Milima Electronic Company sells on account printers for RM1,500 each with a 2-year warranty for performing periodic services and replacing defective parts. Because of COVID 19 pandemic, the company sold only 700 printers on December 2019, however, based on past experience, the company has estimated the total 2-year warranty costs as RM30 for parts and RM60 for labor. On 2020, Miley incurred actual warranty costs relative to 2019 printer sales of RM10,000 for parts and RM18,000 for labor. REQUIRED: (a) Record the above transactions by using the expense warranty treatment for the years 2019 and 2020. (b) If the company sold printers in cash, what are the amounts of warranty expense for 2019 and 2020? (c) Determine amounts of warranty liability that should be recorded under current liabilities and long-term liabilities for the year 2019?Vera., a dealer of household appliances, sells washing machines at an average price of P8,100. The Company also offers to each customer a separate 3-year warranty contract for P810 that requires the Company to provide periodic maintenance services and to replace defective parts. During 2022, Vera sold 300 washing machines and P270 warranty contracts for cash. The Company estimates that the warranty costs are P180 for parts and P360 for labor. Assume sales occurred on December 2022, Veras policy is to recognize income from the warranties on a straight line basis. In 2023, Vera, incurred actual costs relative to 2022 warranty sales of P18,000 for parts and P36,000 for labor. Q10 – What is the amount of current liability relative to these transactions would appear on the 12/31/2022 SFP? Q11 – What is the amount of non-current liability relative to these transactions would appear on the 12/31/2022 SFP? Q12 – What amount of warranty expense would be shown on the income statement for the…Oriole Equipment Company sells computers for $1,220 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 950 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.)In 2021, Oriole incurred actual warranty costs relative to 2020 computer sales of $10,000 for parts and $15,000 for labor. Part 1 Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record sale of computers) 2020 (To record…
- Klein Company sells step-in bathtubs at an average price of $4,100. Customers are allowed to purchase a separate, five-year warranty contract for $215 that requires the company to perform periodic services and to replaceany defective parts. During 2020, the company sold 625 step-in tubs and 460 warranty contracts for cash. It estimates the 5-year warrantywill cost the company $45 for parts and $90 for laborfor each tub sold. Assume all tub sales occurred on December 31, 2020, andthat the company recognizes warranty revenue over the life of the warranty. a.Show all entries are required concerning warranties for 2020 and the computations that justify the amounts. b.What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it beclassified? c.In 2021, KleinCompany incurred actual costs relative to 2020tub warranty sales of $4,100 for parts and $6,800for labor.Record any necessary journal entries for these items. d.What amounts relative…Gen sells cellular phones. Each phone sells for P10,000 and carries a warranty against defects of period of 1 year counting from the date of purchase. The firm sold 60,000 phones in 2019. Past experience indicates that 10% of the phones will need some type of repair during the warranty period. In the past, the firm has incurred expenditures at P400 on each telephone needing repair due to manufacturing defects. At the beginning of the year, the Estimate Liability for Warranties account had a credit of P59,400. Actual expenditures during the year amounted to P1.5M. The balance of the Estimated Liability for Warranties at year-end is: O 500,000 O 2,400,000 O 1,500,000 0 950,000Pronghorn Computer Company sells computers for $1,800 each, which includes a three-year warranty that requires the company to perform periodic services and to replace defective parts. During 2023, Pronghorn sold 580 computers on account. Based on past experience, the company has estimated the total three-year warranty costs at $80 for parts and $100 for labour. (Assume sales all occur at December 31, 2023.) In 2024, Pronghorn Computer Company incurred actual warranty costs relative to 2023 computer sales of $9,800 for parts and $13,000 for labour. (a) Using the expense warranty approach, prepare the entries to reflect the above transactions (accrual method) for 2023 and 2024. Use Salaries and Wages Payable. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation 2023 (To…
- Tamarisk Company sells a machine for $6,720 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 440 machines in 2020 (warranty expense is incurred half in 2020 and half in 2021). As a result of product testing, the company estimates that the warranty cost is $355 per machine ($160 parts and $195 labor). Use "Inventory" account to record the warranty expense.Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts? Part 1 Sale of machinery and warranty expense incurred in 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Warranty accrual on December 31, 2020. (If no entry is…Cullumber Equipment Company sells computers for $1,760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers.Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.)In 2021, Cullumber incurred actual warranty costs relative to 2020 computer sales of $11,200 for parts and $16,800 for labor. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 Sales RevenueCash, Accrued PayrollInventoryWarranty ExpenseWarranty LiabilityAccounts Receivable…Cullumber Ltd. sells computers, computer accessories, and software. On its computer sales, the company provides a one-month warranty that is included in the cost of the computer. Claims under the warranties vary from replacing defective items to providing customers with refunds if they choose. During 2024, the estimated costs related to the one-month warranties was $52,000, of whic $46,800 had been incurred before year end ($39,000 for replacement items and $7,800 in refunds). For an additional charge of $130, Computers Galore also offers extended warranty coverage for two years on its computers. This amount is expected to cover the costs associated with the extended warranties. During 2024, Computers Galore sold 1,040 two-ye warranties. The costs incurred during the year for replacements under these warranties amounted to $40,300. Based on experienc the company estimates that its total warranty costs over the two-year coverage period will be $78,000, which it expects will occur evenly…