Incurred actual warranty costs

Reference no: EM13138007

Miley Equipment Company sells computers for $1,500 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2010, the company sold 700 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $30 for parts and $60 for labor. (Assume sales all occur at December 31, 2010.)

In 2011, Miley incurred actual warranty costs relative to 2010 computer sales of $10,000 for parts and $18,000 for labor.

Instructions:

(a) Under the expense warranty treatment, give the entries to reflect the above transactions (accrual method) for 2010 and 2011

(b) Under the cash basis method, what are the Warranty expense balances for 2010 and 2011?

Reference no: EM13138007

Questions Cloud

Assessing the strengths and areas of concern in aggregate : Describe how you would go about assessing the strengths and areas of concern in your selected aggregate. Whom would you interview and why? What preparations would you need to make?

Compute annual depreciation and carrying value : Compute the annual depreciation and carrying value for the new crane for each of the six years (round to the nearest dollar where necessary) under the double declining method. Round all intermediate percentage calculations to two decimal places.

Explain the effect on temperature and density of air : The effect on temperature and density of air under adiabatic compression, Air is going through a compressor

Compute sales level required in both dollars : Compute sales level required in both dollars and units to earn $210,000 of after-tax income in 2010 with the machine installed and no change in unit sales price. Assume that the income tax rate is 30%.

Incurred actual warranty costs : In 2011, Miley incurred actual warranty costs relative to 2010 computer sales of $10,000 for parts and $18,000 for labor.

What is tachibana corporation taxable income : premiums on officers' life insurance policies (the corporation is the beneficiary for these policies), and $100 for fines. What is Tachibana Corporation's taxable income?

Carrying a uniformy distributed load : The bending moment M at position x m from the end of a simply supported beam of lenght L m carrying a uniformy distributed load of w Kn m-1 is given by

Basic reluctance to use available formal healthcare resource : AREAS OF CONCERNS OF THE AGGREGATE: 1)BASIC RELUCTANCE TO USE AVAILABLE FORMAL HEALTHCARE RESOURCES 2) uSE OF ALTERNATIVE AND COMPLENTARY APPROACHES TO TREAT OF HEALTH PROBLEMS PREVALENT AMONG LARGE SEGEMNT POPULATION

Compute kraft inventory turnover for the year : Compute the number of days required by Kraft to sell its average inventory. Compute Kraft’s inventory turnover for the year.

User Account

All Pages