On December 1, Coronado Company introduces a new product that includes a one-year warranty on parts. In December, 2,900 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $85 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Dec. 31 Debit Credit

On December 1, Coronado Company introduces a new product that includes a one-year warranty on parts. In December, 2,900 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $85 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Dec. 31 Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On 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.
On December 1, Waterway Company introduces a new product that includes a one-year warranty on parts. In December, 3,400 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $85 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31
On December 1, Concord Company introduces a new product that includes a one-year warranty on parts. In December, 1,300 units are sold. Management believes that 6% of the units will be defective and that the average warranty costs will be $90 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31
On December 1, Sheridan Company introduces a new product that includes a one-year warranty on parts. In December, 1,400 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit.Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
On December 1, Coronado Company introduces a new product that includes a one-year warranty on parts. In December, 1,600 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $80 per unit.Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Click if you would like to Show Work for this question: Open Show Work
Old Hampton Company is preparing adjusting entries at December 31. An analysis reveals the following: 1. During December, Old Hampton Company sold 3000 units of a product that carries a 60-day warranty. The sales for this product totaled $100,000. The company expects 4% of the units to need repair under the warranty and it estimates that the average repair cost per unit will be 15$. 2. The company has been sued by a disgruntled employee. Legal counsel believes that it is reasonably possible that the company will have to pay $200,000 in damages. 3. The company has been named as one of several defendants in a $400,000 damage suit. Legal counsel believes it is unlikely that the company will have to pay any damages. 4. Employees earn vacation pay rate at 1 day per month. During December, ten employees qualify to vacation pay. Their average daily wage is $90 per employee. Instructions Prepare adjusting entries, if required for each of the four items.
Yummy sold $656,000 of consumer electronics during July under a one-year warranty. The cost to repair defects under the warranty is estimated at 6.5% of the sales price. On November 10, a customer was given $188 cash under terms of the warranty. (a) Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank. July 31 (b) Provide the journal entry for the November 10 cash payment. If an amount box does not require an entry, leave it blank. Nov. 10
Oven Roasted sold $394,000 of consumer electronics during July under a two-year warranty. The cost to repair defects under the warranty is estimated at 7.5% of the sales price. On November 10, a customer was given $93 cash under terms of the warranty. (a) Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank. (b) Provide the journal entry for the November 10 cash payment. If an amount box does not require an entry, leave it blank.
Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000. Marques adjusts its accounts monthly. A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022. Instructions: a) Prepare the adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022.
Swathmore Clothing Corporation grants its customers 30 days’ credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 2% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly.At the end of 2020, accounts receivable were $602,000 and the allowance account had a credit balance of $66,000. Accounts receivable activity for 2021 was as follows: Beginning balance $ 602,000 Credit sales 2,760,000 Collections (2,623,000 ) Write-offs (53,000 ) Ending balance $ 686,000 The company’s controller prepared the following aging summary of year-end accounts receivable: Summary Age Group Amount Percent Uncollectible 0−60 days $ 440,000 5 % 61−90 days 70,000 11 91−120 days 63,000…
BE11-6 On December 1, Bruney Company introduces a new product that includes a one- year warranty on parts. In December, 1,000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost. Prepare adjusting entry for warranty costs. (LO 2)
Swathmore Clothing Corporation grants its customers 30 days' credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 3% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2020, accounts receivable were $800,000 and the allowance account had a credit balance of $100,000. Accounts receivable activity for 2021 was as follows: Beginning balance S Credit sales Collections Write-offs Ending balance 800,000 4,200,000 (4,000,000) (100,000) 900,000 The company's controller prepared the following aging summary of year-end accounts receivable: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Total Amount $300,000 200,000 100,000 300,000 $900,000 Summary Percent Uncollectible 10% 20 30 50 Required: 1.Prepare a summary…