A company sells personal computeres. The price includes a two-year warranty. During 2016, the company made...

A company sells personal computeres. The price includes a two-year warranty. During 2016, the company made $920,000 in sales. On the basis of past experience, the warranty costs are estimated to be 10% of sales. One customer brought in their computer on January 10, 2017 which required warranty repairs of $200 taken from parts taken from the Repair Parts Inventory. Prepare general journal entries to record: a. the estimated warranty expense on December 31, 2016. b. The warranty repair costs

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MoTown Appliances sells built-in ranges for $ 1,400 each. The price includes a two-year warranty. During...

MoTown Appliances sells built-in ranges for $ 1,400 each. The price includes a two-year warranty. During 2019, the company sells 1,650 ranges. On the basis of past experience, approximately 4% of units sold will require warranty replacement at an average cost of $ 450 per unit. The actual warranty costs paid by MoTown during 2019 for replacement was $ 25,000. Instructions: a) Prepare adjusting journal entries to record the estimated warranty expense and the warranty payments during 2019 at December...

Chapelle Appliances sells dishwashers for $ 1,200 each, which includes a 2-year warranty that requires the...

Chapelle Appliances sells dishwashers for $ 1,200 each, which includes a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, Chapelle sold 600 dishwashers on account. Based on experience, the company has estimated the total 2-year warranty costs at $ 40 for parts and $ 75 for labour. (Assume sales all occur at December 31, 2020.) In 2021, Chapelle Company incurred actual warranty costs relative to 2020 dishwasher sales of $ 4,000...

During 2019 Canada Computer Company sold computers for $100,000 which includes a 2-year warranty. Warranties sold...

During 2019 Canada Computer Company sold computers for $100,000 which includes a 2-year warranty. Warranties sold separately for $70,000 that requires the company to perform periodic services and to replace defective parts. In 2020, Canada Computer Company incurred actual warranty costs relative to 2019 computer sales of $5,000 for parts and $12,000 for labor. Instructions (a) Using the revenue warranty approach, prepare the entries to reflect the above transactions for 2019 and 2020. assuming Canada co. earn any unearned warranties...

You work for an insurance company and you need to set price on a two-year warranty...

You work for an insurance company and you need to set price on a two-year warranty policy. The item of interest is a Dutch oven. Your boss wants the policy to generate $9 of profit. You do some research and find that with probability 0.1 the lid will need to be replaced and that will cost the company $80, and with probability 0.05 the pot will need to be replaced and that will cost the company $150. What should the...

Natty Limited sells custom made jewellery which are sold with a 3 year warranty. The estimated...

Natty Limited sells custom made jewellery which are sold with a 3 year warranty. The estimated warranty cost, based on experience, is 3% of sales the year after the sale, 2% of sales the second year after the sale and 1% of sales the third year after the sale. The company’s total sales for 2019 were $1.2 million. Actual warranty work were performed in 2019 for a cost of $47,000. The opening balance in the Warranty Liability account as of...

The Eyes Have It sells custom eyewear during Year One that come with an embedded warranty....

The Eyes Have It sells custom eyewear during Year One that come with an embedded warranty. If the glasses break during Year Two, they will be fixed for free. Customers may also purchase an extended warranty that covers Year Three. During Year One, the company sold 55,000 pairs of eyeglasses for $1,000,000. Customers who purchased 40,000 of those pairs also purchased the Year Three extended warranty. The extended warranty brought in additional cash of $200,000. The company expects that 6...

Adam Ltd. sells product at a price of $1,200,000, including a one-year warranty guarantee that the...

Adam Ltd. sells product at a price of $1,200,000, including a one-year warranty guarantee that the product was free of defects. The cost of the product is $960,000 and the estimated cost to provide warranty service is $10,000, based on Adam Ltd. past practice on the warranty service. In addition, Adam Ltd. sold extended warranties related to the products for an extra charge of $16,000. Required: Explain how should the revenue be recognized with reference to HKFRS 15 “Revenue from...

During 2016, Rao Co. introduced a new line of machines that carry a one-year assurance warranty...

During 2016, Rao Co. introduced a new line of machines that carry a one-year assurance 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. Rao spent $39,000 of warranty expenses in 2016. Sales $ 1,600,000, Actual Warranty Expenditures $ 39,000 Please provide 2016 journal entries associated with the warranty and sale.

A company sells 1,200 units during the first quarter of the year at a selling price...

A company sells 1,200 units during the first quarter of the year at a selling price of $25 per unit. In addition, the company has a beginning inventory of 600 units that were purchased at $10 per unit, and the following purchases and sales. Date Units sold Units purchased Cost per unit January 10 300 $11 January 25 450 February 7 400 $12 February 14 200 March 5 300 $14 March 27 550 If the company uses...

1) Farmers Tool Company sells lawn mowers with a 2-year service-type warranty. The warranty costs $99....

1) Farmers Tool Company sells lawn mowers with a 2-year service-type warranty. The warranty costs $99. On November 1, 2017, Farmers Tool Company sold 20 lawnmowers at $2,000 each. Ten warranties were sold. On July 14, 2018, $500 is spent on warranty costs. Prepare the journal entries related to the sale on November 1st and for the warranty costs incurred on July 14th. SHOW YOUR CALCULATIONS!!! Do not forget journal entry descriptions. 2) Diamond Corporation declared a cash dividend of...

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