Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Question
Chapter 7, Problem 2YT
To determine
Identify the amount of warranty expense would appear on Company B’s income statement for the month ended August 31, and the amount of August 31 liability.
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During the month, Inline Industries paid $582 to settle warranty claims. Inline uses an estimated warranty account. The journal entry to record the payment would have been:
A. debit Warranty expense, $582; credit Cash, $582.
B. debit Warranty expense, $582; credit Estimated Warranty payable, $582
C. debit Estimated warranty payable, $582; credit Warranty expense, $582
D. debit Estimated warranty payable, $582, credit Cash, $582
[The following information applies to the questions displayed below.]
Hitzu Company sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August
16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on
December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs
cost $138 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier.
1. How much warranty expense does the company report for this copier in Year 1?
2. How much is the estimated warranty liability for this copier as of December 31 of Year 1?
3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?
4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year
1; and (c) the repairs that occur on January 5…
[The following information applies to the questions displayed below.]
Hitzu Company sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August
16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on
December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs
cost $138 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier.
1. How much warranty expense does the company report for this copier in Year 1?
2. How much is the estimated warranty liability for this copier as of December 31 of Year 1?
3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?
4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year
1; and (c) the repairs that occur on January 5…
Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1YTCh. 7 - Prob. 2YTCh. 7 - Prob. 3YTCh. 7 - If a 1,000 bond is selling for 95.5, how much cash...Ch. 7 - Prob. 5YTCh. 7 - Prob. 6YTCh. 7 - Prob. 7YTCh. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - What is a mortgage?
Ch. 7 - Prob. 4QCh. 7 - Prob. 5QCh. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10QCh. 7 - Prob. 11QCh. 7 - Prob. 12QCh. 7 - Prob. 13QCh. 7 - Prob. 1MCQCh. 7 - All of the following are current liabilities...Ch. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQCh. 7 - A 1,000 bond with a stated rate of 8% is issued...Ch. 7 - Prob. 10MCQCh. 7 - Prob. 1SEACh. 7 - Prob. 2SEACh. 7 - Prob. 3SEACh. 7 - Prob. 4SEACh. 7 - Account for mortgages. (LO 3). Nunez Company has...Ch. 7 - Prob. 6SEACh. 7 - Account for bonds. (LO 4). If a 1,000 bound is...Ch. 7 - Prob. 8SEACh. 7 - Prob. 9SEACh. 7 - Prob. 10SEACh. 7 - Prob. 11SEACh. 7 - Prob. 12SEBCh. 7 - Prob. 13SEBCh. 7 - Prob. 14SEBCh. 7 - Prob. 15SEBCh. 7 - Account for mortgages. (LO 3). Curtain Company...Ch. 7 - Prob. 17SEBCh. 7 - Prob. 18SEBCh. 7 - Prob. 19SEBCh. 7 - Prob. 20SEBCh. 7 - Prob. 21SEBCh. 7 - Prob. 22SEBCh. 7 - Prob. 23EACh. 7 - Prob. 24EACh. 7 - Prob. 25EACh. 7 - Prob. 26EACh. 7 - Account for long-term liabilities. (LO 3, 5)....Ch. 7 - Prob. 28EACh. 7 - Prob. 29EACh. 7 - Prob. 30EACh. 7 - Prob. 31EACh. 7 - Prob. 32EACh. 7 - Prob. 33EACh. 7 - Prob. 34EACh. 7 - Prob. 35EACh. 7 - Prob. 36EACh. 7 - Prob. 37EACh. 7 - Prob. 38EACh. 7 - Prob. 39EACh. 7 - Prob. 40EACh. 7 - Prob. 41EACh. 7 - Prob. 42EBCh. 7 - Prob. 43EBCh. 7 - Prob. 44EBCh. 7 - Prob. 45EBCh. 7 - Prob. 46EBCh. 7 - Prob. 47EBCh. 7 - Prob. 48EBCh. 7 - Account for long-term liabilities. (LO 3, 5). On...Ch. 7 - Prob. 50EBCh. 7 - Prob. 51EBCh. 7 - Prob. 52EBCh. 7 - Prob. 53EBCh. 7 - Prob. 54EBCh. 7 - Prob. 55EBCh. 7 - Prob. 56EBCh. 7 - Prob. 57EBCh. 7 - Prob. 58EBCh. 7 - Prepare an amortization schedule for a bond issued...Ch. 7 - Prob. 60EBCh. 7 - Account for current liabilities. (LO 1, 5). On...Ch. 7 - Prob. 62PACh. 7 - Prob. 63PACh. 7 - Prob. 64PACh. 7 - Prob. 65PACh. 7 - Prob. 66PACh. 7 - Prob. 67PBCh. 7 - Prob. 68PBCh. 7 - Prob. 69PBCh. 7 - Prob. 70PBCh. 7 - Prob. 71PBCh. 7 - Prob. 72PBCh. 7 - Prob. 1FSACh. 7 - Prob. 2FSACh. 7 - Prob. 3FSACh. 7 - Prob. 1IECh. 7 - Prob. 2IECh. 7 - Do owners or creditors have more claims on the...Ch. 7 - Prob. 4IE
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