Ford Motor Company disclosed estimated product warranty payable for comparative years as follows: Ford?s sales were $160,123
Question:
Ford Motor Company disclosed estimated product warranty payable for comparative years as follows:
Ford?s sales were $160,123 million in 2005 and increased to $176,896 million in 2006. Assume that the total paid on warranty claims during 2006 was $14,000 million.
a. Why are short- and long-term estimated warranty liabilities separately disclosed?
b. Provide the journal entry for the 2006 product warranty expense.
Transcribed Image Text:
(in millions) 12/31/06 12/31/05 Current estimated product warranty payable Noncurrent estimated product warranty payable Total $13,644 8,289 $21,933 $13,074 7,359 $20,433
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 76% (13 reviews)
a The warranty liability represents estimated outstanding automob...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Question Posted:
Students also viewed these Accounting questions
-
Ford Motor Company disclosed estimated product warranty payable for 2008 and 2007 as follows: Ford's sales were $154,379 million in 2007 and decreased to $129,166 million in 2008. Assume that the...
-
General Motors Company disclosed estimated product warranty payable for comparative years as follows: GM's sales were $135,311 million in 2010 and increased to $148,866 million in 2011. Assume that...
-
General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: Presume that GMs sales were $147,049 million in Year 2 and that the total paid on...
-
Find the nth, or general, term. a. 1, 3, 9,...... b. 25, 5, 1,....... c. 1, -1, 1, -1, .....
-
A sports psychologist tested whether the number of team wins in the previous season could predict the number of wins in the following season in a sample of 32 teams. Complete the regression table for...
-
Distinguish between positive and negative confirmations. Under what circumstances would positive confirmations be more appropriate than negative confirmations?
-
Adjusting Entries and Financial Statements} You have the following unadjusted trial balance for Rangoon Corporation at December 31, 2018: At year-end, you have the following data for adjustments: a....
-
Brooks City has three consolidated high schools, each with a capacity of 1,200 students. The school board has partitioned the city into five busing districtsnorth, south, east, west, and centraleach...
-
Do you think that Robo Advice will see the mass exodus predicted of financial advisers?
-
Shaving is a process that most men perform each morning. Assume that the process begins at the bathroom sink with the shaver walking (say, 5 feet) to the cabinet (where his shaving supplies are...
-
Lachgar Industries warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring...
-
Several months ago, Welker Chemical Company experienced a hazardous materials spill at one of its plants. As a result, the Environmental Protection Agency (EPA) fined the company $410,000. The...
-
The speed of light in a vacuum is 299,792,458 meters/second. Thats an exact numbernot just an approximationbecause the definition of a meter is based on the speed of light. Because its an exact...
-
Why is a potential investor's perspective different than an existing investor's perspective?
-
WireOne makes mobile telephones. It currently has plans to manufacture the AZZ01 model. By redesigning the case at a cost of 95,000, it estimates that it can cut the repair cost of warranty work by...
-
In mid-2011, Sino-Forest Corporation was a company with timber operations in China, including tree plantation (holding of timber for appreciation and/or harvesting), log and wood products trading,...
-
List three financial statement users and a decision for each that may rest on financial statement analysis.
-
Japan Airlines Group (JAL) announced a medium-term business plan with a focus on product competitiveness. Included in the plan were a decrease in the number of large aircraft, especially on...
-
Samuel Company uses the perpetual inventory system. Samuel purchased merchandise with an invoice price of \(\$ 800\), terms \(\mathbf{2} / \mathbf{1 0}, \mathbf{n} / \mathbf{3 0}\). If Samuel returns...
-
What are the two components of a company's income tax provision? What does each component represent about a company's income tax provision?
-
(a) Using data from Table 7.1, find the mass destroyed when the energy in a barrel of crude oil is released. (b) Given these barrels contain 200 liters and assuming the density of crude oil is 750...
-
What are some of the techniques of disclosure for the balance sheet?
-
What are some of the techniques of disclosure for the balance sheet?
-
What is a Summary of Significant Accounting Policies?
-
Which of the following would be treated as non - adjusting item / adjusting event under IAS 1 0 Events After the Reporting Period. i . An alteration to the tax rate that becomes effective after the...
-
If Roten Rooters, Inc., has an equity multiplier of 0 . 4 2 , total asset turnover of 2 . 7 0 , and a profit margin of 5 . 3 percent, what is its ROE?
-
A firm provides the following information about budgeted sales: \ table [ [ Budgeted Sales for May, 7 , 8 0 0 units ] , [ Budgeted Sales for June, 7 , 3 0 0 units ] , [ Budgeted Sales for July, 7 , 5...
Study smarter with the SolutionInn App