User Account

All Pages

Prepare the entries to reflect the transactions

Assignment Help Financial Accounting
Reference no: EM132986348

Question - Lightning 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. In 2020, Lightning sold 600 dishwashers on credit. The estimated stand-alone value of a similar two-year warranty is $180. Based on experience, the company has estimated the total 2-year warranty costs at $ 115 per unit.

In 2021, Lightning Company incurred actual warranty costs relative to 2020 dishwasher sales of $ 11,500.

Required - Assume sales all occur on December 31, 2020:

a) Using the assurance-type (expense-based) approach, prepare the entries to reflect the above transactions for 2020 and 2021.

b) Using the cash basis method, what are the Warranty Expense balances for 2020 and 2021?

Using the service-type (revenue-based) approach, prepare the entries to reflect the above transactions for 2020 and 2021. Warranty revenues are recognized based on the proportion of costs incurred out of the total estimated costs.

Reference no: EM132986348

Questions Cloud

What is the difference in the recognition and measurement : Based on accounting standards, what is the difference in the recognition, measurement and disclosure requirements for a provision and a contingent liability?
Analyze the facts and provide a supported conclusion : Analyze the facts and provide a supported conclusion on whether Derek is an independent contractor or an employee of BCPES
Discuss relevant legislations and regulations : Research and then discuss what relevant legislations and regulations, codes and standards would you need to consider when planning production of documents in an
Journalize transactions using a perpetual inventory system : Journalize the transactions using a perpetual inventory system. Purchased merchandise on account from Braun's Wholesale Supply for $ 4,100, terms 2/10, n/30.
Prepare the entries to reflect the transactions : Using the assurance-type (expense-based) approach, prepare the entries to reflect the above transactions for 2020 and 2021
Explain one organisational standard : Outline and explain one organisational standard, policy or procedure which you follow within your role relevant to CHCECE024 unit in Diploma of Early Education
What is the total amount of for agi deductions : What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year
How would adapt to the change in the future : How you would adapt to the change in the future. We have all experienced workplace or personal changes that required us to adjust our daily actions
Is walmart socially responsible : Is Walmart socially responsible? How Covid-19 has affected the business models for Walmart? What are the current business models?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the amount and character of bateman gain or loss

What is the amount and character of Bateman's gain or loss? Bateman Corporation sold an office building that it used in its business for $800,300

  What is present value of investment a at an annual discount

You are given three investment alternatives to analyze. What is the present value of investment A at an annual discount rate of 12 ?percent?

  What is the net income under absorption costing

The company produced 35,030 units in August and the beginning inventory consisted of 8,770 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. When the company sold 42,500 units and ass..

  What is qms weighted average cost of capital

The cost of preferred stock is 10%, the before-tax cost of debt is 8%, and the firm's tax rate is 35%, What is QM's weighted average cost of capital?

  What is a share appreciation right

Distinguish cash settled share-based payment transaction from an equity settled share-based payment transaction. What is a share appreciation right?

  Compute break-even point-proposed new break-even point units

Shawn Pen & Pencil Sets Inc. has fixed costs of $500,200. Its product currently sells for $22 per unit and has variable costs of $9.80 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost $480,000 and drive up fi..

  State or local government''s budgetary practices and gaap

Find what are the possible differences that may occur between a state or local government's budgetary practices and GAAP?

  What is the total capital of se partnership

What is the total capital of SE partnership? Kara, Sam and Elona were partners with capital balances on January 2, 2019 of P432,000, P288,000

  How many meals must be sold to provide an operating income

Variable costs are $2.50 per meal and fixed costs total $75,000. How many meals must be sold to provide an operating income of $25,000

  How much is the principal of obadiah company

The accountant recorded Interest Receivable of P80,000. How much is the principal of Obadiah Company's NR-officer at December 31, 2020?

  Evaluate any damaging financial repercussions of failure

Evaluate any damaging financial and ethical repercussions of failure to include the inventory write-downs in the financial statements.

  Evaluate the cost of goods sold and ending inventory

Under the perpetual inventory system, determine the cost of goods sold and ending inventory under the weighted average cost method.

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