Req 1A Prepare journal entries that summarize sales of the extended warranties and recognition of any revenue associated with those warranties. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Req 1B < Journal entry worksheet 1 Event 2 Req 2 2 Record the revenue earned on extended warranty. Note: Enter debits before credits. Record entry General Journal Deferred revenue-extended warranties Revenue extended warranties Clear entry Debit 57,938 Credit 57,938 View general journal >

Req 1A Prepare journal entries that summarize sales of the extended warranties and recognition of any revenue associated with those warranties. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Req 1B < Journal entry worksheet 1 Event 2 Req 2 2 Record the revenue earned on extended warranty. Note: Enter debits before credits. Record entry General Journal Deferred revenue-extended warranties Revenue extended warranties Clear entry Debit 57,938 Credit 57,938 View general journal >

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 24E: Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January...

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Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)
Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase, customers are offered the opportunity to also buy a two-year extended warranty for an additional charge. During the year, Carnes received $416,00 for these extended warranties (approximately evenly throughout the year). Required: 1-a. Does this situation represent a loss contingency? 1.b. How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended warranties and any aspects of the warranty that should be recorded during the year. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 2 Does this situation represent a loss contingency? Loss contingency Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 How should it be accounted for? Revenue is deferred as a and warranty expense is computed using the in 2021. Req 1A Req 1B Req 2 Prepare journal entries that summarize…
Carnes Electronics sells consumer electronics that carry a 90-day manufacturer’s warranty. At the time of purchase, customers are offered the opportunity to also buy a two-year extended warranty for an additional charge. During the year, Carnes received $412,000 for these extended warranties (approximately evenly throughout the year). Required: 1. Does this situation represent a loss contingency? Why or why not? How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended warranties (assume all credit sales) and any aspects of the warranty that should be recorded during the year.
Carnes Electronics sells consumer electronics that carry a 90-day manufacturer’s warranty. At the time of purchase, customers are offered the opportunity to also buy a two-year extended warranty for an additional charge. During the year, Carnes received $412,000 for these extended warranties (approximately evenly throughout the year).Required:1. Does this situation represent a loss contingency? Why or why not? How should it be accounted for?2. Prepare journal entries that summarize sales of the extended warranties and any aspects of the warranty that should be recorded during the year.
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…
Haeir Co. sells washing machines that carry a three-year warranty against manufacturer's defects. Based on the entity's experience, warranty costs are estimated at P 300 per machine. During the current year, the entity sold 2,400 washing machines and paid warranty costs of P 170,000. What amount should be reported as warranty expense for the years? What amount should be reported as warranty liability at year-end? respectively * A.P 720,000 and P 170,000 B.P 170,000 and P 720,000 C.P 240,000 and P 550,000 D.P 720,000 and P 550,000
Cupola Awning Corporation introduced a new line of commercial awnings in 2021 that carry a two-year warranty against manufacturer's defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 2% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Actual Warranty Expenditures $60,000 Sales $5,510,000 Required: 1. Does this situation represent a loss contingency? 2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2021. 3. What amount should Cupola report as a liability at December 31, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Does this situation represent a loss contingency? Loss contingency Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare journal entries that…
Right Medical introduced a new implant that carries a five-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to approximate 1% of sales. Sales were $19 million and actual warranty expenditures were $39,750 for the first year of selling the product. What amount (if any) should Right report as a liability at the end of the year? (Enter your answers in whole dollars.) Beg. Bal. Actual expenditures End Bal. Warranty Liability Warranty expense
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 59,000
E. An entity sells washing machines that carry a three-year warranty against manufacturer's defects. Based on the entity's experience, warranty costs are estimated at P300 per machine. During the year, the entity sold 2,400 washing machines and paid warranty costs of P170,000. What amount should be reported as estimated warranty liability at year-end?
Cullumber Ltd. sells computers, computer accessories, and software. On its computer sales, the company provides a one-month warranty that is included in the cost of the computer. Claims under the warranties vary from replacing defective items to providing customers with refunds if they choose. During 2024, the estimated costs related to the one-month warranties was $52,000, of whic $46,800 had been incurred before year end ($39,000 for replacement items and $7,800 in refunds). For an additional charge of $130, Computers Galore also offers extended warranty coverage for two years on its computers. This amount is expected to cover the costs associated with the extended warranties. During 2024, Computers Galore sold 1,040 two-ye warranties. The costs incurred during the year for replacements under these warranties amounted to $40,300. Based on experienc the company estimates that its total warranty costs over the two-year coverage period will be $78,000, which it expects will occur evenly…
Cupola Awning Corporation introduced a new line of commercial awnings in 2024 that carry a two-year warranty against manufacturer’s defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 3% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Sales Actual Warranty Expenditures $ 5,000,000 $ 37,500 Required: Does this situation represent a loss contingency? Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2024. What amount should Cupola report as a liability at December 31, 2024?