Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $3,240 of accrued vacation benefits for the year. 2. During December, Maxum Company sold 4,700 units of a product that carries a 60-day warranty. December sales for this product total $121,000. The company expects 5% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $14. Prepare adjusting entries at December 31 for Maxum Company's year-end financial statements for each of the above separate transactions. View transaction list Journal entry worksheet A B Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $3,240 of accrued vacation benefits for the year. Record the related adjusting entry. Note: Enter debits before credits. Transaction General Journal Debit Credit

Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $3,240 of accrued vacation benefits for the year. 2. During December, Maxum Company sold 4,700 units of a product that carries a 60-day warranty. December sales for this product total $121,000. The company expects 5% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $14. Prepare adjusting entries at December 31 for Maxum Company's year-end financial statements for each of the above separate transactions. View transaction list Journal entry worksheet A B Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $3,240 of accrued vacation benefits for the year. Record the related adjusting entry. Note: Enter debits before credits. Transaction General Journal Debit Credit

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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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. $20,000
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
A companys sales for January are $250,000. If the company projects warranty obligations to be 5% of sales, what is the warranty liability amount for January?
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
Accounting Question
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.
Aviation Systems sells its products with a three-year manufacturing warranty. The company's sales revenue is $600,000. Based on prior experience, the company estimates that warranty costs are 5% of sales revenue. Actual warranty costs related to these sales were $5,000 during the year. How much is the estimated warranty liability reported in the balance sheet this year? Multiple Choice $25,000. $30,000. $10,000. $5,000, >
During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is: Multiple Choice A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500. D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000. E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 2.5% of sales. Assume that sales were $600,000 for January. In February, a customer received warranty repairs requiring $200 of parts and $110 of labor. Required: A. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. Refer to the Chart of Accounts for exact wording of account titles. B. On February 28, journalize the entry to record the warranty work provided in February. Refer to the Chart of Accounts for exact wording of account titles.
White Hat Digital, Inc. starts the year with a credit balance of $3,500 in its Estimated Warranty Payable account. During the year, there were $224,000 in sales and $4,800 in warranty repair payments. White Hat Digital estimates warranty expense at 2% of sales. At the end of the year, what is the balance in the Estimated Warranty Payable account?
Dagupan Company prepares quarterly interim financial reports. The entity sells electrical goods and normally 5% of customers claim on their warranty. The provision in the first quarter was calculated at 5% of sales to date which amounted to P10,000,000. However, in the second quarter, a design fault was found, and warranty claims were expected to be 10% for the whole year. Sales for the second quarter amounted to P15,000,000. What would be the provision charged in the second quarter’s interim income statement?
Lachgar Industries warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring $140 of parts and $95 of labor. a. Journalize the adjusting entry required at June 30, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in July.