Keaton Inc. sells stability balls for $30/each. Each ball comes with a two year warranty. Keaton accrues warranty expense at a rate of 1.5% of sales dollars. Their cost to replace damaged and defective stability balls under warranty is $7 per ball. In June 2023, Keaton sold 1,000 stability balls. What is the dollar value of Keaton's June sales? How much should cooper record was Warranty Expense for June? Prepare the journal entry to record June's Warranty Expense. DR: CR: In the month of August, 2023, 25 balls were returned under the warranty. Prepare the journal entry to record the replacement of the returned balls. DR: CR:
Q: Periodic inventory by three methods; cost of goods sold The units of an item available for sale…
A: Weighted Average Method is one of the methods of inventory valuation in which it is assumed that…
Q: Which of the following statements is/are true? 1. Sunk costs are never relevant in decision making.…
A: Sunk cost means the cost or expense that has occured or spent and it cannot be taken back or…
Q: Concord Corporation had net sales revenue of $5,870,000 and investment revenue of $228,000 for the…
A: Single Step Income Statement is a method of expressing a profit and loss statement that lists all…
Q: Badger Valve and Fitting Company, located in southern Wisconsin, manufactures a variety of…
A: The costs that increase or decrease on accepting or rejecting a proposal are termed as relevant…
Q: Spinners, Co. manufactures wheel rims. The accounting office will be following ABC allocation rates…
A: Activity RateActivity rate refers to a rate used in activity-based costing (ABC) to allocate costs…
Q: Accounts payable Income taxes payable Total current liabilities Bonds payable Total liabilities…
A: Formula = Number of shares = common stock value / value per stock
Q: The financial statements for Leslo Inc. are as follows: LESLO INC. Balance Sheet March 31 Assets…
A: The question is related to Ratio Analysis. 1.Earnings per share is calculated with the help of…
Q: On July 1 of year 1, Riverside Corporation (RC), a calendar-year taxpayer, acquired the assets of…
A:
Q: Cash Accounts receivable Inventory Long-term investments Total assets Liabilities and shareholders'…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: On July 1, Bridgeport Corporation purchases 480 shares of its $5 par value common stock for the…
A: A journal entry is a basic accounting record that is used to chronologically track financial…
Q: Use the following data: Purchase Costs Down payment: $4,800. Loan payment: $340 for 48 months…
A: Formula =Cost of buying = Down payment + Total loan payments - Estimated value at end of loan +…
Q: Zeke's Bikes uses a standard cost system and provides the following information: Standards:…
A: (1) Determining Variable Overhead Allocation Rate:Budgeted VOH÷Budgeted Number of Units=Standard VOH…
Q: Recommendations on how government accounting may be improved in Barbados.
A: Government accounting is the process of recording, analyzing, and reporting the financial…
Q: On May 1, Ace Sport of Toledo prepaid six months of rent, $4,800. Read the requirements. Requirement…
A: Journal entries are the primary reporting of the business transactions in the books of accounts.…
Q: Clearcopy, a printing company, acquired a new press on January 1. The press cost $171,600 and had an…
A: Depreciation expense is the non-cash expense charged on the non-current assets. It is shown on the…
Q: Pincer Company uses the declining balance depreciation method. It buys a machine for $110,400 that…
A: Depreciation is the decrease in the value of the asset due to wear and tear over the useful life of…
Q: On January 1, 2024, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an…
A: leases - It is contract between lessor and lessee wherein an asset is given to lessee in…
Q: Use the following information for the Problems below: The following data pertain to three divisions…
A:
Q: Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors.…
A: Production budget :— This budget is prepared to estimate the number of units to be produced for…
Q: P6-5 (Algo) Analyzing and Interpreting the Effects of Inventory Errors LO6-5 The statements of…
A: The income statement shows the net earnings. The error in the amount in the income statement also…
Q: Revenue generally should be recognized Select one: when realized. when the performance…
A: The question is asking when revenue should generally be recognized in accounting. Revenue…
Q: Sideline Company reported net income for 2021 of $70,000 and in 2022 of $84,000 (both after income…
A: The goods still remain at the end of the year is called ending inventory. It is the amount of goods…
Q: Raner, Harris and Chan is a consulting firm specializing in information systems for medical and…
A: The objective of the question is to determine the impact on the company's profits if it advertised…
Q: On April 30, one year before maturity, Middleton Company retired $240,000 of its 9% bonds payable at…
A: A bond is issued in exchange for a loan that a borrower—a corporate or governmental entity—gets from…
Q: Dill Shipyards operates a dry dock on the East Coast, where it builds and repairs ships. The…
A: "Cost allocation" is a financial and accounting technique that is used to allocate and assign…
Q: At the beginning of 2025, Bridgeport Industries had 26,000 shares of common stock issued and…
A: Earnings per share commonly known as EPS are computed by dividing net profit by the total number of…
Q: Make or Buy (Outsourcing) Example #2 Troy Engines, Inc. manufactures a variety of engines for use in…
A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…
Q: Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued…
A: Face Value of a bond: It is the principal amount that the bond issuer promises to repay to…
Q: Finch Corporation, which has three divisions, is preparing its sales budget. Each division expects a…
A: Sales budget :— This budget is prepared to estimate the number of units sold and amount of sales…
Q: Tesla management are trying to decide whether to keep an older piece of machinery or buy a…
A: The easiest way to figure out depreciation over time is to use straight-line depreciation. This…
Q: The Branson Corporation is considering a change in its cash-only policy. The new terms would be net…
A: Break even price = [(profit under current policy /units sold under new policy) + cost per unit] *(…
Q: The manufacturing costs of Rosenthal Industries for the first three months of the year follow:…
A: Lets understand the basics.In high low method, total costs are bifurcated between the variable cost…
Q: Pharoah Company is preparing its master budget for 2020. Relevant data pertaining to its sales,…
A: Sales budget is the statement prepared by the entity for the purpose of determining the estimated…
Q: Whitman Company has just completed its first year of operations. The company's absorption costing…
A: Using variable costing, only variable manufacturing costs are included in the product cost. Using…
Q: Paul White invested $7.200 at 8% annual interest, and left the money invested without withdrawing…
A: A simple way to figure out how much interest will accrue on a principal amount over a given period…
Q: What is Income in Canada? What is Total Income in Canada? What is Net Income in Canada? What is…
A: The first part of the question asks about the definition of income in Canada. Income in Canada…
Q: DataSpan, Incorporated, implemented Lean Production and would like to redesign its performance…
A: Company performance refers to the judgment of the ability of the employees, efficiency of work done…
Q: Determine the employer's depos
A: Note 1] In general, you must deposit federal income tax and additional Medicare tax withheld as…
Q: Problem 9-5A (Algo) Analyzing and journalizing notes receivable transactions LO C2, C3, P4 The…
A: Notes Receivable are the written documents issued by the borrower to the payee. This is a promissory…
Q: Animal World issues ten-year bonds at their face amount of $100 million with the option to call the…
A: Introduction: -Golden Rule of Journal Entry :—Debit the Receiver, Credit the Giver.Debit what Comes…
Q: 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three…
A: The profit a company makes after deducting all of the expenses involved to producing and offering…
Q: Information for Hobson Corporation for the current year ($ in millions): Income from continuing…
A: Income from the continuing operations are given before tax is = $230Add:Non deductible portion of…
Q: Spacely, Corp. makes sprockets in two models: regular and professional, and wants to refine its…
A: Predetermined overhead rate is a ration to allocate indirect manufacturing overhead.It can be…
Q: Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor…
A: Variances are the differences between the actual values and budgeted values. If the budgeted values…
Q: Lloyd Company produces music boxes. The standard factory overhead cost at 100% of normal capacity is…
A: Variance arises when the actual costs differ from the standard costs. The results are favorable…
Q: At the beginning of 2023, Barnes & Noble had 240,000 shares of $5 par value common stock…
A: A crucial financial metric known as earnings per share (EPS) aids stakeholders and investors in…
Q: Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama.…
A: Return on investment is a measure to find out profit or loss on the investment. It measure the…
Q: Replacement Equipment $112,000 95,000 12,000 Cost Operating expenses Salvage value Useful life 6…
A: The relevant cost to determine whether machine should be replaced or not is the cost that would…
Q: Determine the missing amounts. $ LA Total Manufacturing Costs $272,800 $ $285,200 GA Work in Process…
A: The cost of goods manufactured includes all the costs that are related to the production of goods…
Q: The following selected transactions were completed during August between Summit Company and…
A: Journal entries are the record of the transactions entered into by the organization during the…
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- Casio Co. sells calculators that carry a one- year warranty against manufacturer's defects. Based on company experience, warranty costs are estimated at P 300 per calculator. During 2019, Casio sold 24,000 calculators and paid warranty costs of P 170,000. In its income statement for the year ended Dec. 31, 2019, how much should Casio report as warranty expense? * A.P 5,500,000 B.P 2,400,000 C.P 1,700,000 D.P 7,200,000Charm Company sells 1,000 units of radio sets at P9,000 each for cash. Each radio set is under warranty for one year and the company has estimated from past experience that warranty cost will probably average P500 per unit and that only 60% of the units sold will be returned for repairs. During the year, actual payment incurred for repairs is P180,000. What amount would be recorded as estimated warranty liability at the end of the year? 300,000 480,000 180,000 120,000Happy Trails guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 5% of sales. Assume that the Happy Trails dealer in Colorado Springs made sales totaling $700,000 during 2024. The company received cash for 40% of the sales and notes receivable for the remainder. Warranty payments totaled $15,000 during 2024. Read the requirements. Requirement 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin with the entry to record the sales. (Prepare a single compound entry for this transaction.) Date Accounts and Explanation 2024 Debit G Credit Requirements 1. 2. Assume the Estimated Warranty Payable is $0 on January 1, 2024. Post the 2024 transactions to the Estimated Warranty Payable T-account. At the end of 2024, how much in Estimated Warranty Payable does the company…
- 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 , 48000Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor. 1. The amount reported as warranty expense in 2021 is2. The amount reported under Estimated warranty obligation isCatskills guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 7% of sales. Assume that the Catskills dealer in Colorado Springs made sales totaling $450,000 during 2018. The company received cash for 10% of the sales and notes receivable for the remainder. Warranty payments totaled$12,000 during 2018. Requirements: 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. 2. Assume the Estimated Warranty Payable is $0 on January 1, 20182018. Post the 2018transactions to the Estimated Warranty Payable T-account. At the end of 2018,how much in Estimated Warranty Payable does the company owe?
- Streep Factory provides a 2-year warranty with one of its products which was first sold in 2020. Streep sold $1,000,000 of products subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.In 2018, Dubious company began selling new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows: First year of warranty 2% 2nd year of warranty 5% Sales and actual warranty expenditures are presented below: 2018 2019 Sales 5,000,000 7,000,000 Actual warranty costs 100,000 300,000 What is the estimated warranty liability on Dec. 31, 2019?Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year? fill in the blank 1
- Trekster guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 4% of sales. Assume that the Trekster dealer in Colorado Springs made sales totaling $550,000 during 2018. The company received cash for 40% of the sales and notes receivable for the remainder. Warranty payments totaled $12,000 during 2018. Read the requirements Requirement 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin with the entry to record the sales. (Prepare a single compound entry for this transaction.) Date Accounts and Explanation Debit Credit 2018 Record the warranty expense. Date Accounts and Explanation Debit Credit 2018Wally's Party Warehouse provides wholesale party equipment and materials to party shops. In 2022, Wally's sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties. Required: What was the balance in the Estimated Warranty Liability account at the end of the year?Use the information for the next four (4) questions. In 2020, Pluto 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. The sales and warranty repairs are made evenly during the year. First year of warranty 3% Second year of warranty 9% Sales and actual warranty repairs are as follows: 2020 2021 Sales 7,500,000 10,500,000 Actual warranty repairs 150,000 375,000 What is the warranty expense for 2020? What is the warranty expense for 2021? What is the warranty liability on December 31, 2021 before adjustment? What is the warranty liability on December 31, 2021 after adjustment?