Reference no: EM133073368
Questions -
Q1. TRAILBLAZERS Company sells goods with a warranty under which customers are covered for the cost of repairs of any manufacturing defects within 12 months after purchase. If minor defects were detected in all products sold, repair cost is around P300,000 and if major defects are detected on all products sold repair cost is around P1,500,000. TRAILBLAZERS Company's past experience and future expectations indicate that 70% will have no defects; while 25% will have minor defects and 5% will have major defects. Determine the expected value of the loss?
Q2. The following are provided by PELICANS Company for the year:
-Amount owing to Zion Company for services rendered during December 2021, P450,000
-Estimated long service leave owing to employees in respect of prior years' services, P1,400,000
-Estimated cost of relocating an employee from main office to a branch in another city by January 1, 2022, P200,000
-Estimated cost of overhauling a machine every 5 years (machine is 5 years old by December 31, 2021, P180,000
Determine the provision reported on December 31, 2021?