ABCDoggard Có is a business that sells second hand cars. If a car develops a fault within 30 days of thesale, Doggard Co will repair it free of charge.12.7At 30 April 20X4 Doggard Co had made a provision for repairs of $2,500. At 30 April 20X5 Doggard Cocalculated that the provision should be $2,000.What entry should be made for the provision in Doggard Co's statement of profit or loss for the year to30 April 20X5?(2marked liabilityA charge of $500A credit of $500A charge of $2,000ut 5% of

Doggard Co needs to reduce the provision by $500 ie a credit to the statement of profit or loss.

Answered: ABC Doggard Có is a business that sells…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8PB: Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following...

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Lamplight Plus sells lamps to consumers. The company contracts with a supplier who provides them with lamp fixtures. There is an agreement that Lamplight Plus is not required to provide cash payment immediately and instead will provide payment within thirty days of the invoice date. Additional information: • Lamplight purchases 25 light fixtures for $25 each on August 1, invoice date August 1, with no discount terms. Lamplight returns 5 light fixtures (receiving a credit amount for the total purchase price per fixture of $25 each) on August 3. • Lamplight purchases an additional 15 light fixtures for $10 each on August 19, invoice date August 19, with no discount terms. • Lamplight pays $130 toward its account on August 22. What amount does Lamplight Plus still owe to the supplier on August 30? What account is used to recognize this outstanding amount?
On August 5, John's furniture makes a purchase of $3200 for chairs from a wholesaler. The purchase arrives on September 2 with terms 2/10 ROG. Returns due to damages are $425, and shipping charges are $125 (not included in the purchase price). John's would like to take advantage of the discount with a partial payment of $1800. Answers the questions below. a. What is the discount date? b. How much credit will John's receive for the partial payment? c. What is the remaining amount still due on the invoice? d. By what date does the remaining balance have to be paid?
Record the journal entry for each of the following transactions. Glow Industries purchases 750 strobe lights at $23 per light from a manufacturer on April 20. The terms of purchase are 10/15, n/40, invoice dated April 20. On April 22, Glow discovers 100 of the lights are the wrong model and is granted an allowance of $8 per light for the error. On April 30, Glow pays for the lights, less the allowance.
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business sets up a line of credit with a supplier. The company purchases $10,000 worth of equipment on credit. Terms of purchase are 5/10, n/30. B. A customer purchases a watering hose for $25. The sales tax rate is 5%. C. Customers pay in advance for season tickets to a soccer game. There are fourteen customers, each paying $250 per season ticket. Each customer purchased two season tickets. D. A company issues 2,000 shares of its common stock with a price per share of $15.
Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
Nido Co. has a standing agreement with a supplier for purchasing car parts. The terms of the agreement are 3/15, n/30 from the invoice date of September 1. The company makes a purchase on September 1 for $5,000 and pays the amount due on September 13. What amount does Nido Co. pay in cash on September 13? A. $5,000 B. $4,850 C. $150 D. $4,250
Lamplight Plus sells lamps to consumers. The company contracts with a supplier who provides them with lamp fixtures. There is an agreement that Lamplight Plus is not required to provide cash payment immediately and instead will provide payment within thirty days of the invoice date. Additional information: Lamplight purchases thirty light fixtures for $20 each on August 1, invoice date August 1, with no discount terms Lamplight returns ten light fixtures (receiving a credit amount for the total purchase price per fixture of $20 each) on August 3. Lamplight purchases an additional fifteen light fixtures for $15 each on August 19, invoice date August 19, with no discount terms. Lamplight pays $100 toward its account on August 22. What amount does Lamplight Plus still owe to the supplier on August 30? What account is used to recognize this outstanding amount?
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A business sets up a line of credit with a supplier. The company purchases $10,000 worth of equipment on credit. Terms of purchase are 5/10, n/30. A customer purchases a watering hose for $25. The sales tax rate is 5%. Customers pay in advance for season tickets to a soccer game. There are fourteen customers, each paying $250 per season ticket. Each customer purchased two season tickets. A company issues 2,000 shares of its common stock with a price per share of $15.
Party Warehouse Inc. rents a wide variety of products (e.g., tables, chairs, tents) for special events. Upon rental, Party Warehouse requires a deposit which is forfeited if the equipment is not returned at the end of the rental period. Deposits charged are twice the cost of the equipment, and Party Warehouse keeps the equipment in its accounting records until deposits are forfeited. On April 5, a customer rented various products for an event to be held on April 8, and Party Warehouse collected a $10,000 deposit. The products were returned on April 10. Required: 1. Prepare the entries to record the receipt of the deposit and refund of the deposit at the end of the rental period. 2. Assume that the customer only returns 90% of the containers on April 10. Prepare the entries to record the forfeiture of the deposit.
Bronkey Alazma Inc. manufactures thought glasses (a creepy device that records the thoughts of people who look your eyeglasses). The products cost $60 to manufacture and sells for $500 each. On January 1, 20X1, Bronkey Alazma Inc.’s trial balance reported a $3,480 credit balance in its “Allowance for Warranties” liability account, representing its liability for estimated repairs on thought glasses sold through December 31, 20X0. Under the terms of its customer sales contract, Bronkey agrees to replace any device that fails within one year of sale. Based on its experience, Bronkey estimates that 4 percent of the devices that it sells during a year will need to be replaced. During 20X1, Bronkey sold 12,000 of the devices and replaced 270 defective devices (each costing $60 per unit). Of the 270 replacement devices, 71 relate to sales made during 20X0 and 199 relate to sales made during 20X1. Ignoring any shipping and handling costs, what is Bronkey’s warranty expense for the year ended…
Shatner Importers, Inc. sells coffee pots for $120 each. On November 12, the company sold to a customer on account with terms of /15, n/30. The customer paid for 20 of the coffee pots on November 27 and paid for the remaining on 11th. Provide the necessary journal entries for Shatner to record these transactions under both the most-likely-amount and expected-value methods. For the most-likely-amount method, assume both that the customer will take the discount and won't take the discount. For the expected-value approach, assume that the customer is70% likely to take the discount and ignore any constraints on variable consideration. (Ignore the journal entry that would typically be necessary to record the reduction of inventory and cost of goods sold.) Round to two decimal places.b. Provide a comparison of the impact on the income statement for each method. begin by recording the transactions under the most-likely-amount method, assuming that the customer will take the…
journal entries for the following transactions of Furniture Warehouse. Aug 3 Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. Aug 8 Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. Aug 15 Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. Aug 18 Customer paid their account in full with cash.

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