Rabs Corporation manufactures high-end home electronic systems. The entity provides a one-year warranty for all products...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rabs Corporation manufactures high-end home electronic systems. The entity provides a one-year warranty for all products sold. The entity estimates that the warranty cost is P200 per unit sold and reported a liability for estimated warranty cost of P650,000 at the beginning of the year. During the current year, the entity sold 5,000 units for a total of P9,000,000 and paid warranty claims of P750,000 on current prior year sales. What is the warranty liability at year-end? 2. In 2020, Curious Company began selling new line of products that carry a two- year warranty against defects. Based on past experiences with other products, the entity estimated warranty costs as a percentage of peso sales. First year of warranty Second year of warranty Sales Actual warranty costs 2020 5,000,000 100,000 2% 5% 2021 7,000,000 300,000 What is the warranty expense for 2020? What is the warranty liability on December 31, 2020? What is the warranty expense for 2021? What is the warranty liability on December 31, 2021? Rabs Corporation manufactures high-end home electronic systems. The entity provides a one-year warranty for all products sold. The entity estimates that the warranty cost is P200 per unit sold and reported a liability for estimated warranty cost of P650,000 at the beginning of the year. During the current year, the entity sold 5,000 units for a total of P9,000,000 and paid warranty claims of P750,000 on current prior year sales. What is the warranty liability at year-end? 2. In 2020, Curious Company began selling new line of products that carry a two- year warranty against defects. Based on past experiences with other products, the entity estimated warranty costs as a percentage of peso sales. First year of warranty Second year of warranty Sales Actual warranty costs 2020 5,000,000 100,000 2% 5% 2021 7,000,000 300,000 What is the warranty expense for 2020? What is the warranty liability on December 31, 2020? What is the warranty expense for 2021? What is the warranty liability on December 31, 2021?
Expert Answer:
Answer rating: 100% (QA)
Answer 1 Warranty Expense for 2020 The warranty expense for 2020 is calculated as follows Total sale... View the full answer
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these accounting questions
-
On December 31, the warranty liability was estimated to be $100,000. On January 16 of the following year, results of a study done before December 31 were received. These study results indicate that...
-
Home Products Company manufactures a complete line of kitchen glassware. The Beverage Division specializes in 12-ounce drinking glasses. Erin Fisher, the superintendent of the Beverage Division,...
-
entity provides a two-year warranty on its products. Based on past history, they estimate that warranty costs will be equal to 1.9% of the product cost in the first year and 2.9% of the product cost...
-
Draw a plausible mechanism for each of the following transformations: (a) (b) [TSOH] MENH2 -H20
-
At December 31, 2012, the trial balance of Stack Company contained the following amounts before adjustment. Instructions(a) Based on the information given, which method of accounting for bad debts is...
-
Item 17 Part A Consider (Figure 1). Figure Z 0.3 m 120 45 F 60 1 of 1 0.25 m < 17 of 21 Determine the magnitude of the moment of the 260-N force about the x axis. Express your answer to three...
-
The systems flowchart presented in Figure 11-12 and the following description summarize ConSport Corporations cash disbursements system: a. The accounts payable department approves all invoices for...
-
The following combined income and retained earnings statement, along with selected balance sheet data, is provided for Gemini Corporation: Instructions: 1. Using the direct method, compute the amount...
-
Intrinsic Value Calculation for Lowes 2019-2020 In this, calculate how much a share of the stock of your firm should be worth. One method you will use is the Discounted Dividend Model, which will...
-
On December 1, Year 1, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and...
-
Identifying and Assessing Risks of Material Misstatement and Cloud9 Case Study documents as a guide to assist in answering the following questions. For each of the responses and topics discussed...
-
Below I list some important terms and topics to help you review. You are responsible for all class notes, articles, readings, and films that have been shown or assigned thus far. Identity and Gender...
-
For the Disney revenue recognition footnote compare the two different footnotes presented and explain the difference between the two and your opinion on why this footnote has changed so significantly...
-
Length of 7 observations measured constructed at 98 % condence interval for a mean value and variance of their height, assuming that the length comes from a normal distribution. N(, o), both...
-
Forrest Gump Company acquired a tree plantation assets for a lump-sum amount of P20,000,000 which is equal to the lump-sum value of the group of assets. At the time of purchase the company is unable...
-
Question 1 Phillip Inc. produces and sells a single product. The company uses a standard cost system for control purposes and sets predetermined overhead rates based on direct labour hours. The...
-
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill-money market fund that...
-
Borrowing costs should be recognised as an expense and charged to the profit and loss account of the period in which they are incurred : A. If the borrowing costs relate to qualifying asset B. If the...
-
What are the two types of merchandisers? How do they differ?
-
Use the Boost Plus, Inc. data in Exercise E14-21 to prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method. In Exercise...
-
The unadjusted trial balance of Anniston Air Purification System at December 31, 2018, and the data needed for the adjustments follow. Adjustment data at December 31 follow: a. On December 15,...
-
In what terms are standard variable overhead application rates (SR) usually stated? a. Per dollar b. Per direct labor hour c. Per unit of product d. Per month
-
The gross profit on the interim income statement of a firm using standard costs is computed as: a. Sales less cost of goods sold at standard b. Sales less cost of goods sold at standard plus net...
-
The formula [(Actual Price Standard Price) X Actual Quantity] can be used to calculate which cost variance? a. Variable overhead volume b. Labor efficiency c. Materials efficiency d. Materials price
Study smarter with the SolutionInn App