How much is recorded in the warranty liability account

Assignment Help Accounting Basics

Reference no: EM132085484

Question: Warranties

In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates that repair costs will average 2% of the total selling price.

Required: 1. How much is recorded in the warranty liability account as a result of selling the water heaters during 2013, assuming no warranty service has yet been performed?

2. Prepare the necessary adjusting entry at December 31, 2013.

Reference no: EM132085484

Questions Cloud

What is a warranty liability : What is a warranty liability? What is the purpose of accruing a warranty liability before any actual claims are made?

Power plant to the customer get very hot : Long wires, that carry electricity from the power plant to the customer get very hot due to the amount of current as well as the amount of conductive material

What are committing strategies in assessment of technology : Explain the most important elements and the role of identification and assessment of emerging technologies in the organization or company?

Calculate the total cash flow net of income taxes in year : The company uses straight-line depreciation on all equipment. Calculate the total cash flow net of income taxes in year 3

How much is recorded in the warranty liability account : In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates.

What is the portfolio weight on the spdrs : You want to build a two asset portfolio including SPDRs and T-Bills that has an expected return of 5.50%. A SPDR is a Standard and Poor's Depositary Receipt.

What is the depletion expense : The Weber Company purchased a mining site for $1, 750,000 on July 1. The company experts to mine ore for the next 10 years and anticipates that a total.

Edge length of the face-centered cubic : Platinum (atomic radius = 1.38 Å) crystallizes in a cubic closely packed structure. What is the the edge length of the face-centered cubic unit cell and the den

What is the purpose of operationalizing variables : What is the purpose of operationalizing variables? What additional information should law enforcement authorities seek out?

User Account

All Pages