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- Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?PHAGE 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 60,000Bull has a one-year product warranty on selected items in its product line. The estimated warranty liability on sales made during 2021, which was outstanding as of December 31, 2021, amounted to P416,000. The warranty cost on sales made in 2022 are estimated at P1,504,000. Actual warranty costs incurred during the current 2022 fiscal year are as follows. Warranty claims honored on 2021 sales P 416,000 Warranty claims honored on 2022 sales 992,000 Total Warranty Claims honored P1,408,000 Required: How much is the estimated warranty liability as of December 31, 2022?
- Casio Co. sells calculators that carry a one- year warranty against manufacturer's defects. Based on company experience, warranty costs are estimated at P 300 per calculator. During 2019, Casio sold 24,000 calculators and paid warranty costs of P 170,000. In its income statement for the year ended Dec. 31, 2019, how much should Casio report as warranty expense? * A.P 5,500,000 B.P 2,400,000 C.P 1,700,000 D.P 7,200,000Relay Company estimated that annual warranty expense at 2% of annual net sales. The net sales for 2021 amounted to P4,000,000. On January 1, 2021, the warranty liability was P60,000 and the warranty payments during 2021 totaled P50,000. What is the warranty liability on December 31, 2021? O P10,000 O P90,000 O P70,000 O P80,000Skysong Factory provides a 2-year warranty with one of its products which was first sold in 2025. Skysong sold $997,500 of products subject to the warranty. Skysong expects $120,250 of warranty costs over the next 2 years. In that year, Skysong spent $71,080 servicing warranty claims. Prepare Skysong's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 12/31/25 Account Titles and Explanation (To record payment for warranty costs incurred) (To record sales) Debit Credit 1
- Pronghorn Corp. provides at no extra charge a two-year warranty with one of its products, which was first sold in 2020. In that year, Pronghorn sold products for $2.14 million and spent $68,900 servicing warranty claims. At year end, Pronghorn estimates that an additional $520,800 will be spent in the future to service warranty claims related to the 2020 sales. Prepare entries for the warranty that recognize the sale as a multiple deliverable with the warranty as a separate service that Pronghorn bundled with the selling price of the product. Ignore any cost of goods sold entry. Sales in 2020 occurred evenly throughout the year. Warranty agreements similar to this are available separately, are estimated to have a stand-alone value of $619,900, and are earned over the warranty period as follows: 2020-25%, 2021-50%, and 2022-25%. Also prepare the entries to record the $68,900 expenditure for servicing the warranty during 2020, and the adjusting entry required at year end, if any, under…The following events occurred during the year ended 30 June 2020 for Electrical Limited. Electrical’s main product is backed by warranty. Sales of this product for the year totalled $445,000. The opening balance of provision for warranty claims was $12,720. During the year, Electrical’s warranty expense was $38,040 and claims paid to customers totalled $30,240. June sales totalled $312,000. Electrical Ltd. collected GST of 10% on this amount. This is due to be paid to the tax office by the seventh day of the following collection. On 30 June 2020, Electrical Ltd. took out a loan for $130,000 from AUZ Bank. Repayments of principal are scheduled evenly over a five-year period. Interest on the loan is paid in the year it is incurred. Required: For each item, indicate the account name and the amount to be included as a current liability on Electrical’s balance sheet prepared at 30 June 2020. (show your working for your calculation for each amount).PART 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…
- ABC Company manufacturers high end-whole electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost id P2,000 per unit sold and reported a liability for estimated warranty costs P6.5 million at the beginning of this year. If during the current year, the company sold 5,000 units for a total of P36.3 million and paid warranty claims of P7,500,000 on current and prior year sales. What amount of liability would the company report on its statement of financial position at the end of the current year.Siomai Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2020:• Net sales- P3,200,000• Warranty liability (debit balance before adjustment) - P10,000• Warranty liability (credit balance after adjustment)- P54,000. Which of the following entries was made to record the 2020 estimated warranty expense? A. DR: Warranty Expense- P54,000 and Retained Earnings- P10,000; CR: Estimated Warranty Liabilities- P64,000 B. DR: Warranty Expense- P64,000; CR: Retained Earnings- P10,000 and Estimated Warranty Liabilities- P54,000 C. DR: Warranty Expense- P44,000; CR: Estimated Warranty Liabilities- P44,000 D. DR: Warranty Expense 64,000; CR: Estimated Warranty Liabilities- P64,000Blue 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 $1,200
