In 2009, Slimon Corp began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows: Sales and actual warranty expenditures for 2009 and 2010 are present below: 2009 Sales - $300,000 Actual warranty expenditures for 2009 - $10,000 Estimated total warranty expenditures for 2 years: $21,000 2010 Sales - $400,000 Actual warranty expenditures for 2010 - $20,000 Estimated total warranty expenditures for 2 years: $28,000 What is the estimated warranty liability at the end of 2010? $19,000 $29.000 $49,000
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- During 2008, Luciana Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 3% within 12 months following sale and 5% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2007 and 2008 are as follows: Sales Actual expenditures 2007 40,000,000 1,000,000 2008 50,000,000 4,000,000 At December 31, 2008, Luciana would report estimated warranty liability of O None of these O 2,200,000 O 1,500,000 O 2,500,0009. Fillmore Company started selling a new product that carried a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are: First year of warranty = 3%; Second year of %3D warranty = 5%. Total sales and %3D actual warranty repairs for 2011 and 2012 are given on the table below. What amount should Fillmore report as its estimated warranty liability as of December 31, 2012? 2011 2012 Sales P4,200,000 P6,960,000 Actual warranty expenditures 148,800 180,000During 2018, Stable Company introduced a new line of product that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales Actual Warranty Expenditures 2018 P 400,000 P 6,000 2019 1,000,000 40,000 2020 1,400,000 90,000 P2,800,000 P136,000 What amount should Stable report as estimated warranty liability at December 31, 2020? What amount of warranty expense should be reported for 2019?
- Nance Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to the calendar year 2012: Net sales $1,500,000 Warranty liability account Balance, Dec. 31, 2012 $10,000 debit before adjustment Balance, Dec. 31, 2012 50,000 credit after adjustment Which one of the following entries was made to record the 2012 estimated warranty expense? Group of answer choices A) DR. Warranty Expense 30,000 CR. Retained Earnings (prior-period adjustment) 5,000 CR. Warranty Liability 25,000 B) DR. Warranty Expense 25,000 DR. Retained Earnings (prior-period adjustment) 5,000 CR. Warranty Liability 30,000 C) DR. Warranty Expense 20,000 CR. Warranty Liability 20,000 D) DR. Warranty Expense 30,000 CR. Warranty Liability 30,000During 2017, Blevert Co. introduced a new line of machines that carry a three-year warranty against manufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales and actual warranty expenditures for the first three- year period were as follows: Sales. Actual Warranty Expenditures 2017 $700,000. $5,000 2018 $1,300,000. $23,000 2019 $2,100,000. $100,000 $4,100,000. $128,000 What amount should Blevert report as a liability at Dec 31, 2018? a. $133,000 b. $235,000 c. $212,000 d. $156,000A new product introduced by Reyes Promotions carries a two-year warranty against defects. The estimated warranty costs related to peso sales are as follows: Year of sale.. .3% Year after sale..... .5% Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales 800,000 1,000,000 Expenditures 12,000 70,000 2020 2021 11. How much is the warranty expense in 2021? 12. How much is the estimated liability as of December 31, 2021? Assume the 2020 warranty did not yet expire.
- Nance Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to the calendar year 2012: Net sales $1,500,000 Warranty liability account Balance, Dec. 31, 2012 $10,000 debit before adjustment Balance, Dec. 31, 2012 50,000 credit after adjustment Which one of the following entries was made to record the 2012 estimated warranty expense? Group of answer choices DR. Warranty Expense 30,000 CR. Retained Earnings (prior-period adjustment) 5,000 CR. Warranty Liability 25,000 DR. Warranty Expense 25,000 DR. Retained Earnings (prior-period adjustment) 5,000 CR. Warranty Liability 30,000 DR. Warranty Expense 20,000 CR. Warranty Liability 20,000 DR. Warranty Expense 30,000 CR. Warranty Liability 30,00010. During 2011, Rex Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales are P6,000,000for 2011 and P10,000,000 for 2012. Actual warranty expenditures are P90,000 for 2011 and P300,000 for 2012. On December 31, 2012, what is the estimated warranty liability? a. 570,000 b. 100,000 c. 450,000 d. 0Maps During 2005, Cory Company introduced a new line of machines that carry a two-year warranty against manufacturer's defects. Based on industry experience, the estimated warranty costs related to peso sales are as follows: Year of sale 4% Year after sale 6% Sales and actual warranty expenditures for the years ended December 31, 2005 and 2006 were as follows: Actual warranty Sales expenditures 2005 2006 500,000 700,000 P 15,000 47,000 Pl,200,000 P 62,000 What amount should Cory report as its estimated warranty liability at December 31, 2006? PO b. P16,000 c. P42,000 d. P58,000 2.
- In 2023, Ayayai Corp. began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows: First year of warranty 2% Second year of warranty 5% Sales and actual warranty expenditures for 2023 and 2024 are presented below: 2023 2024 Sales Actual warranty expenditures O $74900 O $12020 $469000 $601000 O $51000 O $23900 17000 Ayayai uses the expense approach to account for warranties. What is the estimated warranty liability at the end of 2024? 34000The 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 $2.9 million (all credit) for 2021. Actual warranty expenditures were $51,100 and were recorded as warranty expense when incurred. 2. Although no customer accounts have been shown to be uncollectible, Classical estimates that 1% 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 $2.4 million in penalties. 4. Classical is the plaintiff in a $4.9 million lawsuit filed against a supplier.…Matthews Corporation warrants its products for two years. The estimated product warranty is 5% of sales. Assume that sales were $2,500,000 for 2011. In May of 2012, a customer received warranty repairs requiring $1,185 of parts and $250 of labor. Required: (1) Journalize the adjusting entry required at December 31, 2011 to record the accrued product warranty. (2) Journalize the entry to record the warranty work provided in May of 2012.