Harbour Company disclosed estimated product warranty payable for comparative years as follows: Current Year (in millions) $15,520 9,440 $24,960 Current estimated product warranty payable i Noncurrent estimated product warranty payable Prior Year (in millions) $14,880 8,320 $23,200 Total Assume that Harbour's sales were $183,040 million in the current year and that the total paid on warranty claims during the current year was $16,000 million. a. The distinction between short and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash relative to the quick current assets and other longer-term ( the busine b. Journalize the adjusting entry for the current year's product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

Harbour Company disclosed estimated product warranty payable for comparative years as follows: Current Year (in millions) $15,520 9,440 $24,960 Current estimated product warranty payable i Noncurrent estimated product warranty payable Prior Year (in millions) $14,880 8,320 $23,200 Total Assume that Harbour's sales were $183,040 million in the current year and that the total paid on warranty claims during the current year was $16,000 million. a. The distinction between short and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash relative to the quick current assets and other longer-term ( the busine b. Journalize the adjusting entry for the current year's product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 34E

See similar textbooks

Similar questions

PHAGE COMPANY estimates its annual warranty expense at 4% of net sales. The following balances are given by EUSTASS: Net sales – 1,500,000; warranty liability – balance 12/31/2021 debit (before adjustment) of 10,000; warranty liability - balance 12/31/2021 credit (after adjustment) of 50,000. Which of the following entries was made to record the 2021 estimated warranty expense? a. Warranty expense 60,000 10,000 Retained earnings Warranty liability 50,000 b. Warranty expense Retained earnings Warranty liability 50,000 10,000 60,000 c. Warranty expense Warranty liability 40,000 40,000 d. Warranty expense Warranty liability 60,000 60,000
Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $11,201 $10,739 Noncurrent estimated product warranty payable 6,813 6,004 Total $18,014 $16,743 Assume that Harbour's sales were $132,098 million in current Year and that the total paid on warranty claims during the current year was $11,547 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term . b. Provide the journal entry for the current Year product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank. Product Warranty Expense Product Warranty Payable c. What two conditions must be met in order for a product…
Accrued Product Warranty Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: (in millions) Current estimated product warranty payable Noncurrent estimated product warranty payable Total Year 2 Feedback $14,903 9,065 $23,968 X Presume that Lachgar's sales were $194,201 million in Year 2 and that the total paid on warranty claims during Year 2 was $15,364 million. ▼ Check My Work Review the need for a classified balance sheet. Year 1 a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands business relative to the quick current assets and other longer-term demands $14,289 7,989 $22,278 b. Provide the journal entry for the Year 2 product warranty expense. If an amount box does not require an entry, leave it blank. Product Warranty Expense Product Warranty Payable X on the
Volvo Group reported the following information in a recent year for its product warranty costs along withprovisions and utilizations of warranty liabilities (amounts in millions). Beginning product warranty liabilities, January 1 . SEK 9,881Additional provisions to product warranty liabilities 7,836Utilizations and reductions of product warranty liabilities (7,134)Ending product warranty liabilities, December 31 . . . . . . . . . . . . . . . . . . . . . SEK 10,583 1. Prepare Volvo’s journal entry to record its estimated warranty liabilities (provisions) for the year. 2. Prepare Volvo’s journal entry to record its costs (utilizations) related to its warranty program for the year. Assume those costs involve replacements taken out of inventory, with no cash involved. 3. How much warranty expense does Volvo report for the year?
31 December 20X0. During the year ended 31 December 20X1, $25,000 in claims were paid to (12.13 X Co sells goods with a one year warranty and had a provision for warranty claims of $64,000 at I December 20X0. During the year ended 31 December 20X1, $25.000 in claims were pald to customers. On 31 December 20X1, X Co estimated that the following claims will be pald n the following year: Anticipated cost $150,000 $25,000 $60,000 Scenario Worst case Probability 5% Best case 20% Most likely 75% What amount should X Co record in the statement of profit or loss for the year ended 31 December 20X1 in respect of the provision? A $57,500 $6,500 $18,500 $39,000 ABCD
Lopez Inc. reported warranty expense of P 1,900,000 for the current year. The warranty liability account decreased by P200,000 during the year. What amount was incurred for warranty expenditures? a. P 1,900,000b. P 1,700,000c. P 2,100,000d. P 0
A new product introduced by Reyes Promotions carries a two-year warranty against defects. The estimated warranty costs related to peso sales are as follows: Year of sale.. .3% Year after sale..... .5% Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales 800,000 1,000,000 Expenditures 12,000 70,000 2020 2021 11. How much is the warranty expense in 2021? 12. How much is the estimated liability as of December 31, 2021? Assume the 2020 warranty did not yet expire.
The company had sales of $3,400,000. The estimated % that will be returned under the warranty is 1.5%. Record the journal entry for the estimated warranty expense
An entity normally provides 4% warranty on its products. The provision in the first quarter was for sales amounting to P5,000,000. For the second quarter, a major issue was found on its products and warrantly claims were expected to be 12% for the whole year. Sales for the second quarter amounted to P15,000,000. What amount should be reported as warranty expenses in the interim income statement for the 2nd Quarter? A. 1,800,0002 B. 2,400,000 C. 2,200,000 D. 1,600,000
27. GPS Company estimated annual warranty expense at 8% of net sales. The following data relate to the current year: Warranty liability, January 1: before adjustment - 100,000 debit. After adjustment - 540,000 credit. What is the amount of net sales for the current year? * a. 8,000,000 b. 6,750,000 c. 5,500,000 d. 1,250,000
Product A comes with a two year warranty when purchased by customers. The estimated warranty costs as a percentage of dollar sales are 3% in the year of sale and 5% in the second year after the sale. The following information relates to sales and warranty expenditures of Product A Actual warranty expenditures $ 10,000 $ 35,000 Year Year 1 Year 2 Sales $400,000 $500,000 Which of the following is NOT part of the required journal entry in Year 1 based on the above information? Multiple Choice Credit cash $10,000 Debit warranty expense $12,000 None of the other alternatives are correct Debit warranty expense $32,000 Credit sales $400,000
Siomai Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2020:• Net sales- P3,200,000• Warranty liability (debit balance before adjustment) - P10,000• Warranty liability (credit balance after adjustment)- P54,000. Which of the following entries was made to record the 2020 estimated warranty expense? A. DR: Warranty Expense- P54,000 and Retained Earnings- P10,000; CR: Estimated Warranty Liabilities- P64,000 B. DR: Warranty Expense- P64,000; CR: Retained Earnings- P10,000 and Estimated Warranty Liabilities- P54,000 C. DR: Warranty Expense- P44,000; CR: Estimated Warranty Liabilities- P44,000 D. DR: Warranty Expense 64,000; CR: Estimated Warranty Liabilities- P64,000