Bombardier Inc. specializes in manufacturing transportation products (aircraft, railway equipment, snowmobiles, and watercraft). The company offers warranties on all of its products. Note 2 to Bombardiers financial statements for fiscal year 2018 stated the following:
Product warranties typically range from one to five years, except for aircraft structural and bogie warranties that extend up to 20 years.
Selected information from Bombardiers annual reports follows (amounts in millions of U.S. dollars):
Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 00 8 Bombardier Inc. specializes in manufacturing transportation products (aircraft, railway equipment, snowmobiles, and watercraft). The company offers warranties on all of its products. Note 2 to Bombardier's financial statements for fiscal year 2018 stated the following: Product warranties typically range from one to five years, except for aircraft structural and bogie warranties that extend up to 20 years. Selected information from Bombardier's annual reports follows (amounts in millions of U.S. dollars): 35 points Revenues Provision for product warranties at year-end 2018 2017 17,118 18,697 1,036 1,143 2016 18, 242 1,190 00:58:22 During fiscal year 2018, Bombardier paid $435 million to customers in exchange for returned products under the warranty. Required: 1. Compute the amount of warranty expense for fiscal year 2018. (Enter your answer in millions of dollars.) Warranty expense 2. Prepare journal entries to record both the warranty expense for the year and the payments made under the warranty. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions of dollars.) View transaction list Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 00 8 2. Prepare journal entries to record both the warranty expense for the year and the payments made under the warranty. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions of dollars.) View transaction list 35 points Journal entry worksheet 00:58:13 Record payments to customers in exchange for returned products. Note: Enter debits before credits. General Journal Debit Credit Transaction Record entry Clear entry View general journal Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 3-a. Compute the ratio of the warranty liability to revenues for the three years. (Round percentage answers to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 00 8 2018 2017 2016 Ratio of the warranty liability revenues 35 points 00:59:01 3-b. Has the ratio increased or decreased during the three-year period? The ratio from 2016 to 2017, and from 2017 to 2018. 4. Based on the limited information available about the warranty expense and payments in 2018, should Bombardier increase the balance of the warranty liability in future years? Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 00 8 Bombardier Inc. specializes in manufacturing transportation products (aircraft, railway equipment, snowmobiles, and watercraft). The company offers warranties on all of its products. Note 2 to Bombardier's financial statements for fiscal year 2018 stated the following: Product warranties typically range from one to five years, except for aircraft structural and bogie warranties that extend up to 20 years. Selected information from Bombardier's annual reports follows (amounts in millions of U.S. dollars): 35 points Revenues Provision for product warranties at year-end 2018 2017 17,118 18,697 1,036 1,143 2016 18, 242 1,190 00:58:22 During fiscal year 2018, Bombardier paid $435 million to customers in exchange for returned products under the warranty. Required: 1. Compute the amount of warranty expense for fiscal year 2018. (Enter your answer in millions of dollars.) Warranty expense 2. Prepare journal entries to record both the warranty expense for the year and the payments made under the warranty. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions of dollars.) View transaction list Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 00 8 2. Prepare journal entries to record both the warranty expense for the year and the payments made under the warranty. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions of dollars.) View transaction list 35 points Journal entry worksheet 00:58:13 Record payments to customers in exchange for returned products. Note: Enter debits before credits. General Journal Debit Credit Transaction Record entry Clear entry View general journal Assignment 4 (Chapters 9 and 10) Saved Help Save & Exit Submit 3-a. Compute the ratio of the warranty liability to revenues for the three years. (Round percentage answers to 2 decimal places (i.e., 0.1243 should be entered as 12.43).) 00 8 2018 2017 2016 Ratio of the warranty liability revenues 35 points 00:59:01 3-b. Has the ratio increased or decreased during the three-year period? The ratio from 2016 to 2017, and from 2017 to 2018. 4. Based on the limited information available about the warranty expense and payments in 2018, should Bombardier increase the balance of the warranty liability in future years
