On January 1, 20X2, Dot Company sold a three-year, service-type extended warranty to Matrix Company for $36,000. The warranty took effect on the date of purchase (January 1, 20X2). What amount of Unearned Warranty Revenue should be reported on Dot's December 31, 20X3, Balance Sheet? $36,000 $24,000 $12,000 $6,000
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- 31 December 20X0. During the year ended 31 December 20X1, $25,000 in claims were paid to (12.13 X Co sells goods with a one year warranty and had a provision for warranty claims of $64,000 at I December 20X0. During the year ended 31 December 20X1, $25.000 in claims were pald to customers. On 31 December 20X1, X Co estimated that the following claims will be pald n the following year: Anticipated cost $150,000 $25,000 $60,000 Scenario Worst case Probability 5% Best case 20% Most likely 75% What amount should X Co record in the statement of profit or loss for the year ended 31 December 20X1 in respect of the provision? A $57,500 $6,500 $18,500 $39,000 ABCDApex Company accepted from a customer P1,000,000 face amount, 6 month, 8% note dated April 1, 2021. On the same day, the entity discounted the note at 10% discount. What amount is the proceeds from discounting?Volvo Group reported the following information in a recent year for its product warranty costs along withprovisions and utilizations of warranty liabilities (amounts in millions). Beginning product warranty liabilities, January 1 . SEK 9,881Additional provisions to product warranty liabilities 7,836Utilizations and reductions of product warranty liabilities (7,134)Ending product warranty liabilities, December 31 . . . . . . . . . . . . . . . . . . . . . SEK 10,583 1. Prepare Volvo’s journal entry to record its estimated warranty liabilities (provisions) for the year. 2. Prepare Volvo’s journal entry to record its costs (utilizations) related to its warranty program for the year. Assume those costs involve replacements taken out of inventory, with no cash involved. 3. How much warranty expense does Volvo report for the year?
- Wall Company sold a product under a two year warranty. The estimated cost of warranty repairs is 2% of net sales. During the 1st two years in business, the entity made the following sales and incurred the following warranty repair costs: 2020 2019 2,500,000 3,000,000 Net Sales Total Repair Costs Incurred 45,000 50,000 What amount should be reported as warranty expense for 2020? O 60,000 50,000 10,000 59,000Blue Corp sells extended 5-year warranty for $60 per product. On Jan 1, 2020, Blue sold 100 extended warranties and incurred $1,000 related to servicing the warranties during 2020. Assume Brown uses a straight-line basis in the recognition of warranty revenue. Which one of the following is the correct journal entry to record sales of extended warranties? Debit Cash $1,000; Credit Sales revenue $1,000 Debit Cash $6,000; Credit Sales revenue $6,000 Debit Cash $6,000; Credit Deferred warranty revenue $6,000 Debit Cash $1,200; Credit Warranty revenue $1,200Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $11,201 $10,739 Noncurrent estimated product warranty payable 6,813 6,004 Total $18,014 $16,743 Assume that Harbour's sales were $132,098 million in current Year and that the total paid on warranty claims during the current year was $11,547 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term . b. Provide the journal entry for the current Year product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank. Product Warranty Expense Product Warranty Payable c. What two conditions must be met in order for a product…
- 1)Suppose the company in the previous question offers a two-year extended warranty, which it sells, separate from the computer. In 2020, extended warranty sales totaled $ 20,000. During 2020 the company incurred $ 2,500 in costs related to the extended warranties. In the Statement of Situation of December 31, 2020, the company will recognize: a.Warranties payable for $ 17,500 b. $ 20,000 unearned warranty revenue c. Warranties payable for $ 2,500 d. Unearned warranty revenue of $ 17,500 2)A company offers two-year warranties at no additional cost on the computers it sells. In 2020, the company had computer sales of $ 200,000 and estimated that the cost of warranties for those computers would be $ 8,000. During 2020, the company incurred $ 1,800 in costs to honor the guarantees of the computers sold in 2020. In the Statement of Situation of December 31, 2020, the company will recognize guarantee debt in the amount of: a. $ 0. The remaining $ 6,200 corresponds to 2021. b. $ 6,200, since…Instructions On August 1, Year 1, Pereira Corporation has sold 1,800 Wiglows to Mendez Company at $450 each. Mendez also purchased a 1-year service-type warranty on all the Wiglows for $12 per unit. In Year 1, On December 31, Pereira recorded warranty costs incurred in Year 1 of $9,000. Warranty costs for Year 2 of $9,600 were recorded on July 31. General Journal 1. Prepare the necessary journal entries to record: Year 1 entries should be recorded in page 1, Year 2 entries should be recorded in page 2. 1 General Journal Instructions 2 3 Required: 1. Prepare the journal entries for the preceding transactions. 2. Show how Pereira would report the items on the December 31, Year 1, balance sheet. 4 5 6 1. The sale of Wiglows and service warranty on account on August 1, Year 1 2. The warranty costs paid during Year 1 3. The warranty revenue earned in Year 1 4. The warranty costs paid during Year 2 5. The warranty revenue earned in Year 2 7 DATE GENERAL JOURNAL ACCOUNT TITLE POST. REF. DEBIT…13. Central Products sells a certain press for $20,000. Included in this price is an implied service contract of $800. Fifty machines were sold in 2020. Warranty expense incurred during 2020 amounted to $25,000. The company uses the sales warranty accrual method. Which entry would probably not be made in 2020? 25,000 Unearned Warranty Revenue Warranty Revenue а. 25,000 b. Cash 1,000,000 960,000 40,000 Sales Unearned Warranty Revenue Cash 40,000 с. Warranty Revenue 40,000 d. Warranty Expense 25,000 Cash 25,000
- On July 1, 20X1, ABC Corp received a P450,000 10% 3-year note from a customer. The principal and interest of the note is collectible in 3 equal payments every June 30, starting June 30, 20X2. How much is the Interest Receivable at Dec 31, 20X1? 22,500 45,000 135,000 0PHAGE COMPANY estimates its annual warranty expense at 4% of net sales. The following balances are given by EUSTASS: Net sales – 1,500,000; warranty liability – balance 12/31/2021 debit (before adjustment) of 10,000; warranty liability - balance 12/31/2021 credit (after adjustment) of 50,000. Which of the following entries was made to record the 2021 estimated warranty expense? a. Warranty expense 60,000 10,000 Retained earnings Warranty liability 50,000 b. Warranty expense Retained earnings Warranty liability 50,000 10,000 60,000 c. Warranty expense Warranty liability 40,000 40,000 d. Warranty expense Warranty liability 60,000 60,000PART A BB Inc's sales during 2021 totaled $375,000, and the company estimates that warranty costs will be 4.4% of sales. The adjusted balance in Estimated Warranty Payable on December 31, 2020 was $21,000 Cr. BB Inc offers replacement products under its warranty plan. During 2021, warranty replacement costs were $12,900. A. Prepare the journal entry to record the 2021 warranty expense, and also the journal entry to record replacement costs under warranty. Use December 31.s the date for both. B. Determine the final balance in the warranty liability account on December 31, 2021. C. Do you recommend that BB Inc retain the 4.4% estimate? Why or why not. Answer in one brief bullet point or sentence. PART B BB Inc operates in Nova Scotia where HST is 15%. During the first quarter (January 1 to March 31) of 2022, 8B Inc purchased $13,000 inventory plus HST. During the first quarter, BB Inc recorded $17,000 sales revenue and charged customers HST. Prepare the journal entry to show BB Inc's…