{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-28T06:03:36-04:00", "answer_date": "2024-05-28 06:03:36", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1821956", "url": "\/study-help\/questions\/the-following-selected-transactions-relate-to-contingencies-of-classical-tool-1821956", "question_creation_date_js": "2024-05-28T06:03:36-04:00", "question_creation_date": "May 28, 2024 06:03 AM", "meta_title": "[Solved] The following selected transactions relat | SolutionInn", "meta_description": "Answer of - The following selected transactions relate to contingencies of Classical Tool Makers, Inc., which began operations in | SolutionInn", "meta_keywords": "selected,transactions,relate,contingencies,classical,tool,makers,inc.,began,operations,july,2021", "question_title_h1": " The following selected transactions relate to contingencies of Classical Tool Makers, Inc., which began operations in July 2021. Classical's fiscal year ends on December", "question_title": " The following selected transactions relate to contingencies of Classical Tool Makers,", "question_title_for_js_snippet": "The following selected transactions relate to contingencies of Classical Tool Makers, Inc , which began operations in July 2021 Classical's fiscal year ends on December 31 Financial statements are issued in April 2022 1 Classical's products carry a one year warranty against manufacturer's defects Based on previous experience, warranty costs are expected to approximate 4 of sales Sales were $2 7 million (all credit) for 2021 Actual warranty expenditures were $43,500 and were recorded as warranty expense when incurred 2 Although no customer accounts have been shown to be uncollectible, Classical estimates that 3 of credit sales will eventually prove uncollectible 3 In December 2021, the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws On January 23, 2022, Classical reached a settlement with state authorities to pay $2 2 million in penalties 4 Classical is the plaintiff in a $4 7 million lawsuit filed against a supplier The suit is in final appeal and attorneys advise that it is virtually certain that Classical will win the case and be awarded $3 2 million 5 In November 2021, Classical became aware of a design flaw in an industrial saw that poses a potential electrical hazard A product recall appears unavoidable Such an action would likely cost the company $570,000 6 Classical offered $25 cash rebates on a new model of jigsaw Customers must mail in a proof of purchase seal from the package plus the cash register receipt to receive the rebate Experience suggests that 70 of the rebates will be claimed Ten thousand and seven hundred of the jigsaws were sold in 2021 Total rebates to customers in 2021 were $112,000 and were recorded as promotional expense when paid Required 1 a Prepare the year end entries for any amounts that should be recorded as a result of each of the above contingencies 1 b Indicate whether a disclosure note is needed for the above transactions ", "question_description": "\"image\"image\"image\"image\"image\"image\"image", "transcribed_text": "The following selected transactions relate to contingencies of Classical Tool Makers, Inc., which began operations in July 2021. Classical's fiscal year ends on December 31. Financial statements are issued in April 2022. 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 4% of sales. Sales were $2.7 million (all credit) for 2021. Actual warranty expenditures were $43,500 and were recorded as warranty expense when incurred. 2. Although no customer accounts have been shown to be uncollectible, Classical estimates that 3% of credit sales will eventually prove uncollectible. 3. In December 2021, the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws. On January 23, 2022, Classical reached a settlement with state authorities to pay $2.2 million in penalties. 4. Classical is the plaintiff in a $4.7 million lawsuit filed against a supplier. The suit is in final appeal and attorneys advise that it is virtually certain that Classical will win the case and be awarded $3.2 million. 5. In November 2021, Classical became aware of a design flaw in an industrial saw that poses a potential electrical hazard. A product recall appears unavoidable. Such an action would likely cost the company $570,000. 6. Classical offered $25 cash rebates on a new model of jigsaw. Customers must mail in a proof-of-purchase seal from the package plus the cash register receipt to receive the rebate. Experience suggests that 70% of the rebates will be claimed. Ten thousand and seven hundred of the jigsaws were sold in 2021. Total rebates to customers in 2021 were $112,000 and were recorded as promotional expense when paid. Required: 1-a Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingencies. 1-b Indicate whether a disclosure note is needed for the above transactions.", "related_book": { "title": "Financial and Managerial Accounting the basis for business decisions\t ", "isbn": "0077664078, 978-0077664077, 78111048, 978-0078111044", "edition": "16th edition", "authors": "Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/290.jpg", "uri": "\/textbooks\/financial-and-managerial-accounting-the-basis-for-business-decisions-16th-edition-290", "see_more_uri": "" }, "free_related_book": { "isbn": "979-8762025584", "uri": "\/textbooks\/windows-11-for-seniors-concise-advance-guide-on-microsoft-windows-11-1st-edition-979-8762025584-193988", "name": "Windows 11 For Seniors Concise Advance Guide On Microsoft Windows 11", "edition": "1st Edition" }, "question_posted": "2024-05-28 06:03:36", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/questions\/the-following-sequences-of-bits-rightmost-bit-first-appear-at-489565", "description": "The following sequences of bits (rightmost bit first) appear at the inputs of a 4-bit parallel adder. 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