FINANCIAL+MANAG.ACCT.
9th Edition
ISBN: 9781260728774
Author: Wild
Publisher: RENT MCG
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Question
Chapter 9, Problem 13E
To determine
Concept Introduction:
Warranty liability is an obligation to fix a product or service that has failed to perform as expected. The seller reports the estimated warranty expense in the period when the revenue from the sale of the product is reported. The warranty liability has to be reported even though future payment on the warranty is uncertain. This is because warranty liability is probable and estimated using experience.
The effect of warranty transactions on the
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Students have asked these similar questions
Keesha Company borrows $200,000 cash on November 1 of the current year by signing
a 90-day, 9%, $200,000 note.
Required:
1. On what date does this note mature?
(Use cells A2 to H6 from the given information to complete this question.)
On what date does this note mature?
Note Term (days)
90
$200,000
Issue Date
1-Nov
Year End
31-Dec
Rate Days in year
9%
360
2. & 3. What is the amount of interest expense in the current year and the following year from this note?
Interest expense in current year
Interest expense in following year
4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.
1. A note receivable due in 18 months is listed on the balance sheet under the caption
A. current assets
B. investments
C. long-term liabilities
D. fixed assets
2. Two methods of accounting for uncollectible accounts are the
A. direct write-off method and the accrual method
B. direct write-off method and the allowance method
C. allowance method and the accrual method
D. allowance method and the net realizable method
3. What is the type of account and normal balance of Allowance for Doubtful Accounts?
A. contra asset, debit
B. asset, credit
C. contra asset, credit
D. asset, debit
Instructions
Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes:
Date
Face Amount
Term
Interest Rate
1.
Mar. 6
$75,000
60 days
4%
Apr. 7
40,000
45 days
6%
Aug. 12
36,000
120 days
5%
Oct. 22
27,000
30 days
8%
Nov. 19
48,000
90 days
3%
Dec. 15
72,000
45 days
5%
2.
3.
4.
5.
6.
Chapter 9 Solutions
FINANCIAL+MANAG.ACCT.
Ch. 9 - Prob. 1QSCh. 9 - Prob. 2QSCh. 9 - Prob. 3QSCh. 9 - Prob. 4QSCh. 9 - Prob. 5QSCh. 9 - Prob. 6QSCh. 9 - Prob. 7QSCh. 9 - Prob. 8QSCh. 9 - Prob. 9QSCh. 9 - Prob. 10QS
Ch. 9 - Prob. 11QSCh. 9 - Prob. 12QSCh. 9 - Prob. 13QSCh. 9 - Prob. 14QSCh. 9 - Prob. 15QSCh. 9 - Prob. 16QSCh. 9 - Prob. 17QSCh. 9 - Prob. 18QSCh. 9 - Prob. 19QSCh. 9 - Prob. 20QSCh. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Exercise 9-5 Computing payroll taxes P2 P3 BMX...Ch. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Prob. 21ECh. 9 - Prob. 22ECh. 9 - Prob. 1PSACh. 9 - Prob. 2PSACh. 9 - Prob. 3PSACh. 9 - Prob. 4PSACh. 9 - Prob. 5PSACh. 9 - Prob. 6PSACh. 9 - Prob. 1PSBCh. 9 - Prob. 2PSBCh. 9 - Prob. 3PSBCh. 9 - Prob. 4PSBCh. 9 - Prob. 5PSBCh. 9 - Prob. 6PSBCh. 9 - Prob. 9SPCh. 9 - Prob. 9CPCh. 9 - Prob. 1.1AACh. 9 - Prob. 1.2AACh. 9 - Prob. 2.1AACh. 9 - Prob. 2.2AACh. 9 - Prob. 2.3AACh. 9 - Prob. 3.1AACh. 9 - Prob. 3.2AACh. 9 - Prob. 3.3AACh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - 3. What are the three important questions...Ch. 9 - 5. What is the combined amount (in percent) of the...Ch. 9 - 6. What is the current Medicare tax rate? This...Ch. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 9DQCh. 9 - Prob. 10DQCh. 9 - 12. ᴬWhat is a wage bracket withholding table?
Ch. 9 - Prob. 12DQCh. 9 - Prob. 1BTNCh. 9 - Prob. 2BTNCh. 9 - Prob. 4BTNCh. 9 - Prob. 5BTN
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Similar questions
- ACCRUED INTEREST RECEIVABLE The following is a list of outstanding notes receivable as of December 31, 20--: REQUIRED 1. Compute the accrued interest at the end of the year. 2. Prepare the adjusting entry in the general journal.arrow_forward1. Determine the estimated warranty liability on December 31, 2022.2. Analyze the estimated warranty liability account to ascertain if adjustment is necessary. The sales and warranty repairs are made evenly during the year.arrow_forwardThe company determines that the interest expense on a note payable for the period ending December 31 is $630. This amount is payable on January 1. Prepare the journal entries required on December 31 and January 1.arrow_forward
- The account "Warranty Liability": Multiple Choice a)has a year-end credit balance equal to the cost of warranty repairs made during the year. b)is closed at the end of the year. c)is credited each time a warranty repair is made. d)is adjusted at the end of the year.arrow_forwardPlease record the following journal entries: A) Record issuance of a notes payable B) record first monthly payment C) Record Second Monthly paymentarrow_forwardRequired:1. Prepare journal entries for each transaction.2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on theinformation presented and balance off each account.3. Prepare the balance sheet extract as at Dec 31 to show the net realizable value for theAccounts Receivable.4. Assume that the aging of accounts receivable method was used by the company and that$7,050 of the accounts receivable as of December 31 were estimated to be uncollectible. Youare now required to:a. Determine the amount to be charged to uncollectible expense (show yourworkings for the computation of this figure).b. Prepare the balance sheet extract to show the net realizable value of the AccountsReceivable as at December 31arrow_forward
- What would be the adjusting entry to be made for 2021 if the company ascertain whether actual warranty cost approximate the estimate assuming sales and warranty repairs made evenly during the year? a. A debit to Warranty Expense and credit to Estimated Warranty Liability of Php192,500 b. A debit to Estimated Warranty Liability and credit to Warranty Expense of Php192,500 c. A debit to Estimated Warranty Liability and credit to Retained Earnings of Php192,500 d. No adjusting entry to be madearrow_forwardPrefix Supply Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume a 360-day year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Prefix Supply Company General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 129 Allowance for Doubtful Accounts 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY…arrow_forward5) Chapter 11 Inc. entered into the following transactions relating to notes payable: Sept. 1 Purchased inventory costing $48,000 by signing an 8-month, 6% note payable. Nov. 1 Purchased inventory costing $30,000 by signing a 1-year, 7% note payable. a. Prepare journal entries to record the above transactions. b. Assuming Chapter 11 Inc. has a December 31 year end, prepare any adjusting entries needed for the accrual ofinterest. For ease of computation assume that Chapter 11 Inc. calculates interest expense based on the number of months outstanding, rather than the number of days.arrow_forward
- On 9/1, the Knight's Stop issues a new part to a customer to replace a defective part the customer purchased the previous year. The new part was issued under the two-year warranty offered on all parts sold by company. On 9/1, Knight's Stop would debit which account for the journal entry? O Accounts Receivable O Inventory O Warranty Payable O Accounts Payable O Warranty Expense O. Cash O Current Portion Long-term Debt ASUS f4 f5 E3 f6 f7 f9 f8 团 f10 f11 & 4. 9. T. Y U F G H 08 因 96 Rarrow_forwardRequesting a statement from a major customer as to its agreement or disagreement with a year-end receivable balance is an example of: * Scanning O Inspection of tangible assets O Confirmation O Recalculationarrow_forwardDuring the month, Inline Industries paid $582 to settle warranty claims. Inline uses an estimated warranty account. The journal entry to record the payment would have been: A. debit Warranty expense, $582; credit Cash, $582. B. debit Warranty expense, $582; credit Estimated Warranty payable, $582 C. debit Estimated warranty payable, $582; credit Warranty expense, $582 D. debit Estimated warranty payable, $582, credit Cash, $582arrow_forward
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