Question
Ex. 7.1 Unearned revenuesrent On December 1, 2016, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and
Ex. 7.1 Unearned revenuesrent On December 1, 2016, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and February, was received in cash from the companys tenant.
Required: Use the horizontal model (or write the journal entries) to record the effects of the following items:
The three months of rent collected in advance on December 1, 2016.
The adjustment that will be made at the end of each month to show the amount of rent earned during the month.
Ex 7.2 Other accrued liabilitiespayroll For the payroll period ended on June 25, 2016, gross pay was $28,600, net pay was $20,400, FICA tax withholdings were $2,000, income tax withholdings were $5,000, and medical insurance contributions were $1,200.
Required: Use the horizontal model (or write the journal entry) to show the effects of the payroll accrual on June 25, 2016.
Ex. 7.3 Other accrued liabilitieswarranties The balance of the Estimated Warranty Liability account was $25,000 on January 1, 2016, and $34,400 on December 31, 2016. Based on an analysis of warranty claims during the past several years, this years warranty provision was established at 1.5% of sales, and sales during the year were $2,600,000.
Required:
What amount of warranty expense will appear on the income statement for the year ended December 31, 2016?
What were the actual costs of servicing products under warranty during the year?
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