Questions attched. Please answer Question 2, 3 and 5a,b,c,d,eshow workings. Question 2Jewellery Limited manufactures and sells different kinds of handmade fine jewellery. Thecompany warrants its products for one year. The average price per piece of jewellery isS5,000 and the company sold 800 products in 2018. By the end of 2018, based on historicalinformation the company estimates 5% of the jewellery sold to develop defective parts withinone year. The estimated average cost of warranty repairs per defective item is $100. During2019, customers have returned 20 pieces of jewellery sold that year for repairs. By the end of2019, the company expects 7% of the jewellery sold to develop defective parts within oneyear. The estimated average cost of warranty repairs per defective item is $120. The companysold 900 products in 2019 with the same average price per piece of 5,000. The balance day ofJewellery Limited is 31 December.RequiredRecord the necessary journal entries in 2018 and 2019 regarding the warranty.Question 3Kenz Limited employs its staff on a five-day working week. The weekly salaries is S15,000and employees are paid in arrears on Friday. That is, when the employees are paid, thesalaries paid are for work performed in the preceding week. Kenz Limited retains $5,000 perweek to pay the Inland Revenue Department for pay-as-you-carn (PAYE) tax on behalf of theemployees and $1,000 per week to pay staff medical benefits. Tax and medical benefits arepaid on the following Monday and Tuesday of each week respectively. The end of thereporting period falls on a Wednesday.Required Prepare the accounting entries necessary to record the salary on balance day and itsраyments. Question 5Telephone Limited signed a contract with Machinery Leasing Company at 1st January 2020to lease a machine. The agreement consists in 10 equal annual payments of $300,000 at thebeginning of each ycar with an interest rate of 15%. The yearly rental payment includesS30,000 of executory costs related to insurance on the machine. The executory costs ofS30,000 are paid to the lessor each year. There is an option to purchase the machine at theend of the lease term for $50,000. The machine has an estimated useful life of 14 years and aguaranteed residual value of $20,000. Both companies adopt straight-line depreciationmethod for all items of PPE. Consider a PVIF (n=10, i=15%) of 0.2472 and PVIFA (n=10,i=15%) of 5.0188. The balance day for Telephone Limited and Machinery Leasing Companyis 31 of December.Required (Round all numbers to the nearest dollar)a) Discuss the nature of this lease to Telephone Limited.b) Discuss the nature of this lease to Machinery Leasing Company.c) Calculate the present value of the minimum lease payment.d) Prepare the journal entries for Telephone Limited in 2020.k) Prepare the journal entries for Machinery Leasing Company in 2020.

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Jewellery Limited manufactures and sells different kinds of handmade fine jewellery. The company warrants its products for one year. The average price per piece of jewellery is S5,000 and the company sold 800 products in 2018. By the end of 2018, based on historical information the company estimates 5% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $100. During 2019, customers have returned 20 pieces of jewellery sold that year for repairs. By the end of 2019, the company expects 7% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $120. The company sold 900 products in 2019 with the same average price per piece of 5,000. The balance day of Jewellery Limited is 31 December. Required Record the necessary journal entries in 2018 and 2019 regarding the warranty.

Jewellery Limited manufactures and sells different kinds of handmade fine jewellery. The company warrants its products for one year. The average price per piece of jewellery is S5,000 and the company sold 800 products in 2018. By the end of 2018, based on historical information the company estimates 5% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $100. During 2019, customers have returned 20 pieces of jewellery sold that year for repairs. By the end of 2019, the company expects 7% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $120. The company sold 900 products in 2019 with the same average price per piece of 5,000. The balance day of Jewellery Limited is 31 December. Required Record the necessary journal entries in 2018 and 2019 regarding the warranty.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 0 950,000
EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all scooters. During 2017, the company recorded net sales of $1,900 million. Historically, about 4% of all sales are returned under warranty and the cost of repairing and or replacing goods under warranty is about 30% of retail value. Assume that at the start of the year EZ Wheels’ balance sheet included an accrued warranty liability of $16.3 million and at the end of the year, the accrued warranty liability balance was $12.4 million. How much did EZ Wheels pay during the year to repair and/or replace scooters under warranty? this seems like the same question is it not 22.8?
EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all scooters. During 2017, the company recorded net sales of $1,900 million. Historically, about 4% of all sales are returned under warranty and the cost of repairing and or replacing goods under warranty is about 30% of retail value. Assume that at the start of the year EZ Wheels’ balance sheet included an accrued warranty liability of $16.3 million and at the end of the year, the accrued warranty liability balance was $12.4 million. What was EZ Wheels Corporation’s warranty expense for 2017? i think it is 22.8 million but i don't know how to use the 16.3 and 12.4
The following situations relate to Bolivia Company.1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2017, and that its total revenue for the product will be $100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be $5 for each product sold, and the cost for a major defect cost is $15. The company also estimates that the minimum amount of warranty expense will be $2,000,000 and the maximum will be$10,000,000.2. Bolivia is involved in a tax dispute with the tax authorities. The most likely outcome of this dispute is that Bolivia will lose and have to pay $400,000. The minimum it will lose is $20,000 and the maximum is $2,500,000. InstructionsPrepare the journal entry to record provisions, if any, for Bolivia at December 31, 2017.
ABC sells products to customers with a warranty. Customers can return the products to ABC for a free replacement within 90 days of purchase. During April 2022, ABC sold 1,500 products to customers. During May, ABC sold 1,800 products to customers. Based on past sales, ABC estimates that 5% of all products sold will be returned for a free replacement. The products cost ABC $20 to produce and they are sold for $35 per item. During April, 100 products were returned and during May, 120 items were returned. As of March 31, 2022, ABC's Warranty Liability had a credit balance of $12,000. If ABC had an inventory balance of $80,000 on March 31, 2022, what should the inventory balance be on April 30, 2022? No purchases of inventory were made during April or May, 2022. Please enter all amounts as a positive number with no dollar signs or commas. For example, if the answer is $2,100, enter 2100. THE ANSWER IS NOT : 49800 , 30000 , 14880 , 48000
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YellowCard ASA manufactures accessories for iPods, iPhones, and iPads. It had the following selected transactions during 2019. (For any part of this problem requiring an interest or discount rate, use 10%.) 1. YellowCard provides a 2-year warranty on the quality of its docking stations, which it began selling in 2019. YellowCard estimates that €45,000 will be spent in the future to warranties related to 2019 sales. During 2019, YellowCard spent €6,000 warranty claims. 2. YellowCard has a 1 year €200,000 loan outstanding from UBS. The loan is set to mature on February 28, 2020. YellowCard makes all of its quarterly interest payments (i.e. interest is due on the last days of each February, May, August, and November). For several years, UBS has agreed to extend the loan, as long as the firm maintains an acid-test ratio of at least 1.25 (Hint: the loan has always been extended and refinanced throughout years before 2019). On December 10, 2019, UBS provided YellowCard acommitment letter…
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Woodmier Lawn Products introduced a new line of commercial sprinklers in 2017 that carry a one-year warranty against manufacturer’s defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experience of others in the industry. Based on that experience, warranty costs were expected to approximate 3% of sales. Sales of the sprinklers in 2017 were $3,000,000. Accordingly, the following entries relating to the contingency for warranty costs were recorded during the first year of selling the product: Accrued liability and expense Warranty expense (3% × $3,000,000) 90,000 Estimated warranty liability 90,000 Actual expenditures (summary entry) Estimated warranty liability 41,400 Cash, wages payable, parts and supplies, etc. 41,400 In late 2018, the company's claims experience was evaluated and it was determined that claims were far more than expected—4% of…
Amazing Company provides a warranty with all its products it sells. It estimates that it will sell 1,200,000 units of its product for the year ended December 31, 2021, and that its total revenue for the product will be P100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be P5 for each product sold, and the cost for a major defect cost is P15. The company also estimates that the minimum amount of warranty expense will be P2,500,000 and the maximum will be P12,000,000.How much is the Provision for Warranty to be reported at December 31, 2021?