La Extended, S.A. sold specialized equipment at a price of $ 900,000 each, with a unit...

La Extended, S.A. sold specialized equipment at a price of $ 900,000 each, with a unit cost of $ 400,000.
On March 1, 2020, it sold 2 pieces of equipment on credit that include a one-year warranty for defects in their components, with the commitment to replace those that present failures. It is estimated that $ 120,000 could be claimed for defects in these components. Both clients took the extended warranty offered and handed in $ 30,000 in cash each to cover an extra year.
On March 25, 2020, one of the customers claimed that the equipment's system was not working properly. La Extended, S.A. replaced the component that had failures, which had a cost of $ 20,000 and discarded the previous one.
On October 20, 2021, the other client claimed equipment failures, so La Extended, S.A. discarded the failed component and replaced it with a new one at a cost of $ 8,000.

a. The record (s) corresponding to the month of March 2020 will increase Net Income by:

b. The record (s) corresponding to the month of March 2020 will increase Net Income by:

Expert Solution

IN THE PRESENT QUESTION..
La Extended, S.A. sold specialised equipment of $ 900000 each
it estimated that claime of defects of components is $120000
unit cost of the equipment is $400000
accordingly its income at time of sale of equipment ON MARCH 1,2020 would be $1800000-$800000-$120000=$880000
NET INCOME = PROFIT ON SALE OF EQUIPMENT + INCOME FROM WANNATY EXTEND
= $880000+$60000 ($30000*2)
= $940000

INCOME ON 25 OF MARCH,2020
NET INCOME =  $940000
ADD BACK ESTINATED CLAIMS OF DEFECT =  $120000
TOTAL = $1060000
LESS ACTUAL CLAIM OF COMPONENT ON 25, MARCH = ($20000)
BALANCE = $1040000

HENCE INCOME INCREASE IN THE MONTH OF MARCH BY $100000 (i.e $1040000-$940000)

ekkarill92 answered 2 years ago

If sold today If sold next year Sale price $2,600,000 $2,750,000 Mortgage balance 1,000,000 900,000...

If sold today If sold next year Sale price $2,600,000 $2,750,000 Mortgage balance 1,000,000 900,000 Capital gain tax 112,500 135,000 Cash flow $1,487,500 $1,715,000 NOI over next year $60,000 Consider the information in the table above. What is the marginal rate of return for keeping the property one additional year

11/1/2019 Crandall Co. sold 500 solar powered snow blowers at a total price of $900,000. The...

11/1/2019 Crandall Co. sold 500 solar powered snow blowers at a total price of $900,000. The cost of the snow blowers is $400,000. The assurance warranties extend for a 2 year period and are estimated to cost 30,000. Crandall also sold extended warranties (service type warranties) related to 500 snow blowers for 2 years beyond the 2 year assurance warranty period for $40,000. No warranty costs were incurred during 2019 for the extended warranties. A Prepare the journal entries at...

A product, sold seasonably, yields a net profit of b dollars for each unit sold and...

A product, sold seasonably, yields a net profit of b dollars for each unit sold and a net loss of l dollars for each unit left unsold when the season ends. The number of units of the product that are ordered at a specific department store during any season is a random variable having probability mass function p(i), i ≥ 0. If s is the total number of units stocked, find the expected profit for this product as a function...

On January 1, 2019, Nonsuch Corporation sold specialized equipment originally costing $9,500 (Nonsuch had paid 9,500...

On January 1, 2019, Nonsuch Corporation sold specialized equipment originally costing $9,500 (Nonsuch had paid 9,500 to buy it as inventory). The market value of the equipment was not readily determinable. Nonsuch sold the equipment to Neverland, Inc. who is going to use it in their operations for 5 years at which time it will have no salvage value. Nonsuch received a $4,000 down payment from Neverland and will receive five payments of 4,000 made annually (without a stated interest...

Price per Unit Variable Cost per Unit Units Sold per Year Basic $ 700 $ 220...

Price per Unit Variable Cost per Unit Units Sold per Year Basic $ 700 $ 220 700 Retest 1,050 580 200 Vital 4,600 3,100 100 Variable costs include the labor costs of the medical technicians at the lab. Fixed costs of $490,000 per year include building and equipment costs and the costs of administration. A basic "unit" is a routine drug test administered. A retest is given if there is concern about the results of the first test, particularly if...

A prescription drug is produced in the United States and sold internationally. Each unit of the...

A prescription drug is produced in the United States and sold internationally. Each unit of the drug costs $60 to produce. In the German market, you sell the drug for 150 euros per unit. The current exchange rate is 0.667 U.S. dollars per euro. Current demand for the drug is 100 units, and the estimated elasticity is 2.5. Assuming a linear demand curve, determine the appropriate sales price (in euros) for the drug. SOLVE USING EXCEL SOLVER. NOTE: aLL PARTS...

Lumin Telecomm produces specialized telecommunication equipment and has made losses each year over the three years...

Lumin Telecomm produces specialized telecommunication equipment and has made losses each year over the three years it has been in existence—it has an ac- cumulated net operating loss of $180 million. In the most recent year, the firm reported an operating loss of $90 million on revenues of $1 billion. If you expect the growth rate in revenues to be 20% a year for the next five years, and the pre- tax operating margin to be − 6% next year,...

Hi-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and...

Hi-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and 17,500 units of T500 at a price of $40 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below: Hi-Tek Manufacturing Inc. Income Statement Sales ……………………………………………………….. $2,100,000 Cost of goods sold ………………………………….. 1,600,000 Gross Margin ..……………............................... 500,000...

Accept Business at Special Price Product A is normally sold for $43 per unit. A special...

Accept Business at Special Price Product A is normally sold for $43 per unit. A special price of $32 is offered for the export market. The variable production cost is $26 per unit. An additional export tariff of 16% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required,...

1.) As each extra unit is sold, what happens to a monopolist’s marginal revenue? ...... (A)...

1.) As each extra unit is sold, what happens to a monopolist’s marginal revenue? ...... (A) A monopolist's marginal revenue decreases. (B) A monopolist's marginal revenue increases. (C) A monopolist's marginal revenue increases then increases again as even more units are sold. (D) A monopolist's marginal revenue remains static. 2.) When government price regulations paves a way for competitors to band together to reduce output, keep away competition and keep prices high it is known as ________....... (A) regulatory capture....

Question