Show the complete solution. ABC company offers P15 rebates for Product GH sold during 2020. It is estimated that 25% of thecustomers will apply for the rebate.During 2020, 5,500,000 units of Product GH were sold, and 250,000 customers applied and weregranted a rebate.On the 2020 Financial Statements dated December 31, determine the amount of Rebate Expenseand Rebates LiabilityO P20,625.000; P16,875.000O P16,875,000; P16.875,000O P20.625,000: P20,625.000O P3,750,000, P16.875.000

Formula: Total Rebate units = Units sold x Estimated Percentages Rebate liability = Rebate expense -…

Answered: ABC company offers P15 rebates for…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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EFG Corporation sold 10,500 dishwashers for P1,100 each during 2020. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages P90 each. Actual warranty costs incurred during 2020 for units sold that year were P296,000. The statement of financial position at year end will report a related liability of: Group of answer choices 945,000 649,000 1,030,900 296,000
A company sold 8,000 units of its signature product for the calendar year ended December 31, 2020. Each unit is sold at P 45,000 including a one- year warranty on its parts. The company expects 3.50% of the products would be defective and that repair costs would costs them P 2,750.00 per unit. For 2020, 235 units were repaired for a total cost of P 640,375.00. Assuming that the Provision for Warranty account had a beginning balance at January 1, 2020 of P 297,730.00, determine the Provision for Warranty balance as of December 31, 2020.
B. At December 31, 2020, Hersheys Company had 1,000 gift certificates outstanding, which had been sold tocustomers during 2020 for P720. Laser operates on a gross margin of 60%. 2. How much revenue pertaining to the gift certificates should be deferred at December 31, 2020?
At December 31, 2020, Feel Company had 20,000 gift certificates outstanding, which had been sold to customers during 2020 for P500 each. Feel operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 20,000 gift certificates should be deferred at December 31, 2020? *
Ward Company’s usual sales terms are net 60 days, FOB shipping point. Sales, net of returns and allowances, totaled P5,000,000 for the year ended December 31, 2019, before year end adjustments. On December 27, 2019, Ward authorized a customer to return, for full credit, goods shipped and billed at P50,000 on December 15, 2019. The returned goods were received by Ward on January 4, 2020, and a P50,000 credit memo was issued on the same date. Goods with an invoice amount of P300,000 were billed to a customer on January 3, 2020. The goods were shipped on December 31, 2019. Goods with an invoice amount of P200,000 were billed and recorded on December 30, 2019. The goods were shipped on January 3, 2020. Ward’s adjusted net sales for 2019 should be? Choices: P4,750,000 P5,050,000 P5,250,000 P4,950,000
Lynford Company sold 10,500 dishwashers for $1,100 each during 2021. The dishwashers are under warranty for one year following the sale. Maintenance on the dishwashers during the warranty period averages $90 each. Actual warranty costs incurred during 2021 for units sold that year were $296,000. The statement of financial position at year end will report a related liability of: Select one: a. $296,000. O b. $649,000. O c. $1,030,900. O d. $945,000.
In accordance with IFRS 15, how much is the balance of Unearned Revenue for Premium Claims at the end of the year? In accordance with IFRS 15, assuming on the subsequent year, 750,000 units of ballpen are sold ,and the company estimates that 80% of the ballpens reaching the customers will redeem their premiums, how much is the total revenue if half were redeemed?
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000 ADD EXPLANATION THANKS
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 4. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000
2. During 2020, Joaquin Company introduced a new line of machines that carry a two-yearwarranty against manufacturer’s defects. Based on industry experience, the estimatedwarranty cost percentages related to peso sales are as follows:Year of sale 1%Year after sale 6%Sales and actual warranty expenditures for 2020 and 2021 were as follows:Year Sales Actual warranty expenditures2020 P1,000,000 P54,0002021 1,400,000 89,000a. How much is the warranty expense to be recognized in 2020 and 2021,respectively?b. What is the estimated warranty liability as of December 31, 2020 and 2021,respectively?
6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise to Reed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end, there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies will pay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31. Reed's adjusting journal entry will include: A) A debit to Sales Discounts for $225 B) A credit to Allowance for Sales Discounts for $2,250 C) A debit to Sales Discounts for $2,050 D) A credit to Sales Discounts for $225 E) No adjusting journal entry is required. Discount will be recognized when payment is received.
Moon Ltd. sells custom made furniture on 24 months' interest free terms to qualifying customers. On 30 June 2023, Moon Ltd. sells $71,600 of furniture to Jessie Ltd., which cost $40,300, payable by 30 June 2025. By 30 June 2024, only 40% of the ordered furniture was delivered. The appropriate interest rate for this transaction is determined to be 11.20% per annum. Moon Ltd. uses perpetual system. By 30 June 2025, all payment was made, and the remaining furniture was delivered. Required: Question 4 Calculate the present value of the $71,600 to be received on 30 June 2025.

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