Prob.4 (20pts) On November 10, 2013, Lee Co. began operations by purchasing coffee grinders for resale. Lee uses the perpetual inventory method. The grinders have a 60-day warranty that requires the company to replace any non-working grinder. When a grinder is returned, the company discards it and mails a new one from merchandise inventory. The companys cost per new grinder is $24 and its retail selling prices is $50 for both 2013 and 2014. The manufacturer has advised the company to expect warranties to be 10 % of sales dollars. The following transactions and events occurred. 2013 Sold 50 grinders for $2,500 16-Nov Recognize warranty expense related to November sales with an adjusting entry. 30-Nov Replaced six grinders that were returned under the warranty. Sold 200 grinders for $10,000 cash. 12-Dec 18-Dec Replaced 17 grinders that were returned under the warranty 28-Dec Recognize warranty expense related to December sales with an adjusting entry. 31-Dec 2014 Sold 40 grinders for $2,000 each Replaced 36 grinders that were returned under the warranty. 7-Jan 21-Jan Recognize warranty expense related to January sales with an adjusting entry. 31-Jan Prepare the journal entries for the transactions listed above. Prob.2 (20pts) Sonya Systems borrows $500,000 on October 1, 2018, by signing a 180-day, 10% note.: 1. Suppose the face value of the note equals $500,000, the principal of the loan. Prepare the journal entries to record: a. Issuance of the note. b. The entry at year-end, December 31, 2018 c. Payment of the note at maturity MouTest- Prob.1 (20pts) On January 1, a machine costing $400,000 with a 5-year life and an estimated $10,000 salvage value was purchased. It was also estimated that the machine would produce 500,000 units during its life. The actual units produced during its first year of operation were 200,000. Determine the amount of depreciation expense for the first year under each of the following assumptions: 1. The company uses the straight-line method of depreciation. 2. The company uses the units-of-production method of depreciation. 3. The company uses the double-declining-balance method of depreciation