User Account

All Pages

Calculate the estimated warranty expense for the year

Assignment Help Financial Accounting
Reference no: EM132983617

Question - Pharoah Company sells remote control airplane engines, which carry a one-year warranty. If a customer brings in a defective engine, he replaces the engine with a new one from his inventory. Pharoah estimates that 2% of units sold will be defective. As at January 1, the Warranty Liability had a credit balance of $400.

Pharoah provided the following information for his year end of December 31.

Cost per engine $115

Total sales 940 units

Actual warranty costs $1,175

Required -

A) Calculate the estimated warranty expense for the year.

B) Prepare the journal entry for the estimated warranty expense for the year.

C) Prepare the journal entry to record the actual warranty costs for the year.

D) Calculate the ending balance in the warranty liability account at the end of the year.

Reference no: EM132983617

Questions Cloud

Determine the annual straight-line depreciation : Equipment acquired at the beginning of the year at a cost of $30,800 has an estimated residual value of $2,800. Determine the annual straight-line depreciation
What is wildhorse cyclicals cost of common equity capital : If the risk-free rate of return is 3.70 percent and market risk premium is 5.71 percent, what is Wildhorse Cyclicals' cost of common equity capital
Determine the weighted average of shares outstanding : The Company has a December 31 year-end. Determine the weighted average of shares outstanding
What would be the amortized cost of the bonds on january : Interest is paid semi-annually on January 1 and July 1. What would be the amortized cost of the bonds on January 1, 2022
Calculate the estimated warranty expense for the year : As at January 1, the Warranty Liability had a credit balance of $400. Calculate the estimated warranty expense for the year
Identify the capital structure issues : You are newly appointed CFO in a listed Mid-Sized company in the food industry. Identify the capital structure issues that CFO must address
What amount should be reported as loss on discounting : On June 30, 2020, Benedetta Company discounted at the bank a customer's P300,000, What amount should be reported as loss on discounting
What is the interest expense to be recognized : The discounting is accounted for as a conditional sale. What is the interest expense to be recognized on the date of discounting
Compute the value of the development option : Compute the value of the development option, F(L), and the optimal exercise policy, assuming the firm can exercise the option at any time

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the journal entry to record amortization

Seida reported income of $262,000 and declared and paid dividends of $118,000. What is journal entry to record 2018 amortization for trademark excess fair value

  Prepare the journal entry necessary to record tax provision

Prepare the journal entry necessary to record the tax provision at December 31st of Years 3 and 4

  Compute the unit variable cost for a helmet

Compute the unit variable cost for a helmet - evaluatethe unit variable cost  with the given data.

  What is the stock price

The required rate of return on this stock is 10.88 percent. What is the stock price according to the constant growth dividend model

  Appraisal showed the estimated values

Land and a warehouse were acquired for $890,000. What amounts should be recorded in the accounting records for the land and for the warehouse

  What is the option payoff for a long call position

A call option on a stock has an exercise price of $23.65. If the stock price at expiration is $26.50, what is the option payoff for a long call position?

  Identify the relevant facts in the scenario

Identify the relevant facts in the scenario and evaluate on the possible course of action that you will take

  What would be the price if the bond was compounded quarterly

If the required return on this bond is 5.4% compounded semiannually, What would be the price if the bond was compounded quarterly?

  How would one exploit

E$/€ is 1.1 dollars per euro. The one year forward rate F$/€ = 1.2. Is there an arbitrage opportunity here, and if so, how would one exploit it?

  Uses predetermined manufacturing overhead rate

B&B uses a predetermined manufacturing overhead rate based on machine-hours. for the month of October: before disposition of the underapplied/overapplied overhead, balances from B&B's accounting records on October 30th are as follows: Overapplied or ..

  Should Saban make the switch and why

Should Saban make the switch? (Assume the compensating balance at the new bank will be deposited in a? non-interest-earning account.)

  What is the ap balance

What is the AP balance? A company has an Accounts Payable period of 25 days and annual COGS of $300,000. Assume 365 days.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd