1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $6,090 of accrued vacation benefits for the year. 2. During December, Maxum Company sold 3,800 units of a product that carries a 60-day warranty. December sales for this product total $133,000. The company expects 7% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $11. repare adjusting entries at December 31 for Maxum Company's ear-end financial statements for each of the above separate ansactions.
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- Blake Department Store sells television sets with one-year warranties that cover repair and replacement of television parts. In the month of June, Blake sells forty television sets with a per unit cost of $500. If Blake estimates warranty fulfillment at 10% of sales, what would be the warranty liability reported in June? A. $1,000 B. $2,000 C. $500 D. $20,000Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?Accounting Question
- 3. Jansen Company sells a product for $400 per unit, which includes a 30-day warranty against product defects. Experience indicates that four percent of the units sold will prove defective, requiring an average repair cost of $50 per unit. During the first month of business, product sales were $320,000, and 20 of the units sold were found to be defective and repaired during the month. What is the accrued liability for product warranties at month-end? a $1,000 b. $600 c. $1,600 d. $2,000On December 1, XYZ Limited introduces a new product that includes a one-year warranty on parts. In November, 1000 units are sold. Management believes that 15% of the units will be defective and that the average warranty costs will be $50 per unit. Prepare the adjusting entry at November 30 to accrue the estimated warranty cost.Modem Appliances, Inc. sells food processors for $150 with a 120-day warranty against defects. Past experience indicates that 5% of the processors will have some defect during the warranty period and that the necessary repairs and adjustments will cost $25 per defective unit. Sales for August are $225,000. What is the estimated liability for product warranties for units sold in August? Select one: a. $3,000 b. $1,800 C. $11,250 d. $1,875 e. None of the above
- Presley Company sells a product that includes a one-year warranty on parts and labor. During the year, 10,000 units are sold. Presley expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $14,000. Instructions Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred. Prepare the necessary journal entries for the following transactions: (a) On September 1, Lore Company borrowed $150,000 from National Bank on a 6-month, 8% note. (b) On December 31, Lore Company accrued interest (assume adjusting entries are only made at the end of the year).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 $16 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash.. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. December 9 December 16 December 29 December 31 Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. January 5 January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty. December sales for this product total $127,000. The company expects 6% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $19. Record the related adjusting entry.
- Back in Time Inc. warrants its products for one year. The estimated product warranty is 6.5% of sales. Assume that sales were $810,500 for March. In April, a customer received warranty repairs requiring $44,780 of parts. a. Determine the warranty liability at March 31, the end of the first month of the current fiscal year. Round your answer to the nearest dollar.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 $15 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $16,800 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $11,200 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to…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 $16 and its retail selling price is $80. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,800 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 12 razors that were returned under the warranty. December 16 Sold 180 razors for $14,400 cash. December 29 Replaced 24 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 120 razors for $9,600 cash. January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…