Pacers Company sells its products in expensive reusable containers. The customer is charged a deposit for each container delivered and received a refund for each container returned

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 1MC: The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before...
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Pacers Company sells its products in expensive reusable containers. The customer is charged a deposit for each container delivered and received a refund for each container returned within two years after the year of delivery. Pacers Company accounts for the containers not returned within the time limit as being sold at the deposit amount. Information for 2023 is as follows: Containers held by customers at December 31, 2023 from deliveries in: 2021 – P310, 000;       2022 – P500, 000;       2023 – P850,000 Deposits distributed for containers returned from deliveries in 2021 – P280,000;        2022 – P390, 000;       2023 - P590, 000 How much is the ending balance of deposits on December 31, 2023? 2. Pistons company sells portable DVD players for P28,000 each and offers to each customer a 3-year service contract for an additional P3,000. During 2023, the company sold 800 DVD players and 500 service contracts for cash. Expenses related to the service contracts for 2023 amounted to P90,000. Past records of the company indicate that the pattern of repairs has been 50% in the year of sale, 30% in the second year, and 20% in the third year. Sales of the contract are made evenly during the year How much is the liability for service contracts on December 31, 2023?
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