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- Problem 1 In 2020, Plumpton 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 Second year of warranty 3% 9% Sales and actual warranty repairs are as follows: Sales Actual warranty repairs 2020 P5.000.000 100.000 2021 P7.000.000 250.000 1. How much is the warranty expense for 2020? 2. How much is the estimated warranty liability for 2021 ?obligation 300,000 100,000 rent income Required: Compute the total current liabilities on December 31, 2020. Problem #2: Multiple Company provided the following information on December 31, 2021: Accounts payable after deducting debit balances in suppliers' accounts of P100,000 Accrued liabilities Note payable - due March 31, 2022 Note payable – due May 1, 2022 Bonds payable – due December 31, 2023 500,000 50,000 1,000,000 800,000 2,000,000 On March 1, 2022 before the 2021 financial statements were issued, the note payable of P1,000,000 was replaced by an 18-month note for the same amount. The entity is considering similar action on the P800,000 note due on May 1, 2022. The financial statements were issued on March 31, 2022. Required: 1. Compute total current liabilities 2. Compute total noncurrent liabilities "Not intended for publication. For classroom instruction purposes onlyQuestion 13 Masterpiece Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $603,000 in sales. In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,500. Which of the following is the entry needed to record the replacement of the defective goods? Warranty Expense Estimated Warranty Payable 18,090 18,090 O Estimated Warranty Payable Merchandise Inventory 18,500 18,500 Estimated Warranty Payable 16,500 Merchandise lInventory 16,500 18,090 O Warranty Expense Merchandise Inventory 18,090 «>
- Require information Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Recognized warranty expense related to November sales with an adjusting entry. Replaced 10 razors that were returned under the warranty. Sold 150 razors for $12,000…Exercise 13-15 (Algo) Warranties; financial statement effects [LO13-5, 13-6] Cupola Awning Corporation introduced a new line of commercial awnings in 2024 that carry a two-year warranty against manufacturer's defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 3% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Sales $ 5,860,000 Actual Warranty Expenditures $ 39,750 Required: 1. Does this situation represent a loss contingency? 2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2024. 3. What amount should Cupola report as a liability at December 31, 2024? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Loss contingency Does this situation represent a loss contingency? Required 3 Yes Answer is not complete. € Required 1 Required 2 >Question 10 A Plus Appliances sells dishwashers with a four-year warranty. In 2019, sales revenue for dishwashers is $94,000. The company estimates warranty expense at 6.5% of revenues. What is the total estimated warranty payable of A Plus Appliances as of December 31,2019? A Plus Appliances began operating in 2019. (Round your final answer to the nearest dollar.) O $1548 O $4230 O $6110 O $3318 11:21 AN 4/22/202
- EXERCISE 7 Filmore Company started selling a new product that carried a 2-year warranty against defects. The warranty provides assurance that the new product will function as intended based on agreed-upon specifications. Based on past experiences with other products, the estimated warranty costs related to peso sales are computed as follows: First year of warranty 3% Second year of waranty 5% Total sales and actual warranty repairs for 2019 and 2020 are given: 2019 2020 P 4,200,000 Actual warranty expenditures 148,800 Sales P 6,960,000 180,000 REQUIRED: a.) What amount should Fillmore report as its estimated warranty liability as of December 31,2020? b.) Based on the above data, assuming that sales and repairs occur evenly throughout the year, how much would be the predicted warranty expense covering 2019 and 2020 sales still under warranty at December 31,2020?2. A credit sale of P750 is made on June 13, term 2/10, net/30. A return of P50 is granted on June 16. The amount received as payment in full on June 23 is: a. P700 b. P650 c. P686 d. P685Required information Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. Sold 150 razors for $12,000 cash. December 16 December 29 December 31 January 5 Replaced 20 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 100…
- Required information Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 10 razors that were returned under the warranty. December 9 December 16 December 29 Sold 150 razors for $12,000 cash. Replaced 20 razors that were returned under the war ity. December 31 January 5 Recognized warranty expense related to December sales with an adjusting entry. Sold 100 razors…Required information Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 December 9 December 16 Sold 150 razors for $12,000 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 10 razors that were returned under the warranty. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100…Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $13 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 80 razors for $6,400 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 16 razors that were returned under the warranty. December 16 Sold 240 razors for $19,200 cash. December 29 Replaced 32 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 160 razors for $12,800 cash.…
