EX 11-20 Accrued product warranty OBJ. 5 Logan Manufacturing Co. warrants its products for one year. The estimated product war- ranty is 2.5% of sales. Assume that sales were $398,000 for January. In February, a cus- tomer received warranty repairs requiring $410 of parts and $250 of labor. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in February

EX 11-20 Accrued product warranty OBJ. 5 Logan Manufacturing Co. warrants its products for one year. The estimated product war- ranty is 2.5% of sales. Assume that sales were $398,000 for January. In February, a cus- tomer received warranty repairs requiring $410 of parts and $250 of labor. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in February

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.22EX

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6. EX.10.190 Hadley Industries warrants its products for one year. The estimated product warranty expense is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring $205 of parts and $75 of labor. Required: a. Journalize the adjusting entry required at June 30, the end of the first month of the current year, to record the estimated product warranty expense. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the warranty work provided in July. If an amount box does not require an entry, leave it blank.
12 Warranty Costs Milford Company sells a motor that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, two percent of the units sold will require repair at an average cost of $125 per unit. The following data reflect Milford's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 34,500 33,000 37,500 105,000 180 270 195 240 330 315 690 525 315 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)
Question Content Area Estimated Warranty Liability Yummy Co. sold $199,000 of consumer electronics during July under a six-month warranty. The cost to repair defects under the warranty is estimated at 7% of the sales price. On November 11, a customer was given $419 cash under terms of the warranty. Question Content Area Required: a. Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank. July 31 - Select - - Select - - Select - - Select - Question Content Area b. Provide the journal entry for the November 11 cash payment. If an amount box does not require an entry, leave it blank. Nov. 11 - Select - - Select - - Select - - Select -
QS 9-13 (Algo) Recording warranty repairs LO P4 On December 1, Home Store sells a mower (that costs $280) for $580 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On January 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $41 in materials taken from the Parts Inventory. Prepare the December 1 entry to record the mower sale (and cost of sale), the December 31 adjusting entry for estimated warranty liability, and the January 24 entry to record the warranty repairs. (Round your answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 3 4 > Record the mower sales. Note: Enter debits before credits. Date General Journal Debit Credit December View transaction list Journal entry worksheet 2 3 4 > Record the cost of mower sales. Note: Enter debits before credits. Date General Journal Debit Credit December 01 Journal entry worksheet < 1 2 4 Record the estimated warranty…
Estimated Warranty Liability Cook-Rite Co. sold $512,000 of equipment during January under a two-year warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On August 15, a customer required a $293 part replacement, plus $224 of labor under the warranty. Required: (a) Provide the journal entry for the estimated warranty expense on January 31 for January sales. accounts payable/cash/product warranty expense/product warranty payable/wages payable Jan. 31 (b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank. accounts payable/cash/product warranty expense/product warranty payable/product warranty expense/supplies Aug. 15
Accrued product warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $323,000 for January. On February 7, a customer received warranty repairs requiring $230 of parts and $90 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. =88
Practice Question During year 1, Gum Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to sales are 2% within twelve months following the sale and 4% in the second twelve months following the sale. Sales and actual warranty expenditures for the years ended December 31, year 1 and year 2, are as follows: Actual warranty expenditures $2,250 7,500 $9,750 Year 1 Year 2 Sales $150,000 250,000 $400,000 AICPA.920535FAR What amount should Gum report as estimated warranty liability in its December 31, year 2 balance sheet?
Accrued Product Warranty Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 5% of sales. Assume that sales were $327,000 for January. In February, a customer received warranty repairs requiring $135 of parts and $75 of labor. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in February.
Estimated Warranty Liability Savory Co. sold $764,000 of equipment during January under a one-year warranty. The cost to repair defects under the warranty is estimated at 6% of the sales price. On August 15, a customer required a $298 part replacement, plus $92 of labor under the warranty. Required: (a) Provide the journal entry for the estimated warranty expense on January 31 for January sales. Jan. 31 (b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank. Aug. 15
Brief Exercise 13-13 Bramble Factory provides a 2-year warranty with one of its products which was first sold in 2020. Bramble sold $976,100 of products subject to the warranty. Bramble expects $119,940 of warranty costs over the next 2 years. In that year, Bramble spent $64,080 servicing warranty claims. Prepare Bramble's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Date 2020 During 2020 12/31/20 (To record sales) (To record warranty claims) Debit Credit
Question 12 On August 1, 2020, Alba Trading sold a machine for $13,000 cash with a two-year parts warranty. On March 1, 2021, the machine requires on-site repairs which cost $200 of the repair parts inventory. Alba estimates warranty costs to be 4% of dollar sales. In 2020, Alba reports warranty expense of: O A. $ 720. O B. $ 320. O C. $ 520. O D. $ 200.
Accrued Product Warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $195,000 for January. On February 7, a customer received warranty repairs requiring $290 of parts and $80 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. Product Warranty Expense fill in the blank de49f2038077f99_2 fill in the blank de49f2038077f99_3 Product Warranty Payable fill in the blank de49f2038077f99_5 fill in the blank de49f2038077f99_6 Feedback b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. Product Warranty Payable fill in the blank 6bb2adf3f03304a_2 fill in the blank 6bb2adf3f03304a_3 Supplies fill in the blank…