The auditor for Universal Tools, Inc. discovered in 2023 that the warranty liability account showed a $25,000 debit balance. She investigated and discovered that the 2% estimate based on sales for warranty expense was recorded and understated, and it was more likely 3.5%. Sales for 2023 were $5,750,000. What is the appropriate journal entry as a result of this discovery? Group of answer choices Warranty Expense 86,250 Warranty Liability 86,250 Warranty Expense 201,250 Warranty Liability 201,250 Warranty Liability 86,250 Warranty Expense 86,250 Warranty Liability 25,000 Warranty Expense 25,000

The auditor for Universal Tools, Inc. discovered in 2023 that the warranty liability account showed a $25,000 debit balance. She investigated and discovered that the 2% estimate based on sales for warranty expense was recorded and understated, and it was more likely 3.5%. Sales for 2023 were $5,750,000. What is the appropriate journal entry as a result of this discovery? Group of answer choices Warranty Expense 86,250 Warranty Liability 86,250 Warranty Expense 201,250 Warranty Liability 201,250 Warranty Liability 86,250 Warranty Expense 86,250 Warranty Liability 25,000 Warranty Expense 25,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 8PA: The following select financial statement information from Candid Photography. Compute the accounts...

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I'm studying for a test and I want to know how to do each question for it, can you walk me through step by step how to solve this one? The following data concern XYZ Corporation for 2018:Bad debts expense for the year 11,000Accounts receivable—December 31, 2018 235,000Credit sales during the yearAllowance for doubtful accounts—December 31, 20181,600,00018,000 Calculate the net realizable value of the accounts receivable.
It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
A. Based on the above and the result of your audit, answer the following(Round off present value factors to four decimal places and final answers to nearest hundred) 3. The noncurrent notes receivable as of December 31, 2022 is
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