EXERCICE 2 The company NAGA sales household electronics A, B, C, D, E. A and B are fabricated by NAGA itself. C, D, E are bought to the company TOLMEN Those which are fabricated and sold by NAGA, A and B are guaranteed by NAGA Those which are sold by NAGA but fabricated by TOLMEN are guaranteed by TOLMEN. In case of failure, NAGA repay the customer and is automatically reimbursed by TOLMEN The average probabilities of failure are following: Product A: 5% will be replaced, cost of replacing 250 12% will be repaired, cost of repair 70 Product B 3% will be replaced, cost of replacing: 410 13% will be repaired, cost of repair. 125 Product C: 14% will be replaced, cost of replacing: 80 5% will be repaired, cost of repair 55 Product D 6% will be replaced, cost of replacing: 375 10% will be repaired, cost of repair 65 Product E: 15% will be replaced, cost of replacing: 135 7% will be repaired, cost of repair: 65 This year, the company has sold Product A 236 Product B 84 Product C 541 Product D 158 Product E 102 31/12/N DEBIT CREDIT Charge of provision for guarantees given to the customers Accounts receivable on TOLMEN X Provisions for guarantees given to the costumers 31/12/N CREDIT DEBIT X x Charge of provision for guarantees given to the customers Accounts receivable on TOLMEN Provisions for guarantees given to the costumers X EXERCISE 3 Mercedes-Best Ltd is selling used cars and gives half a year guarantee for the sold cars. All the cars cost 10 000 euros. 4th Revenue in year 2011 was 1" quarter 60 000 e 2nd quarter 80 000 e 3rd quarter 150 000 e quarter 30 000 e Revenue total 320 000 euros. Cars are sold in cash. Usually 13% of the sold cars need to be fixed average cost for the fix is 450e / car. Accounting postings are a bit late so please make a journal for 31.12.2011 which includes: revenue posting for whole year (VAT 0%) Calculate and post a provision for possible returns