What are the warranty expense balances for 2014 and 2015

Assignment Help Cost Accounting

Reference no: EM13215790

Merritt Equipment Company sells computers for $1,790 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2014, the company sold 850 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2014.)

In 2015, Merritt incurred actual warranty costs relative to 2014 computer sales of $12,400 for parts and $18,600 for labor.

1) Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2014 and 2015.

2)Under the cash-basis method, what are the Warranty Expense balances for 2014 and 2015?

3)he transactions of part (1) create what balance under current liabilities in the 2014 balance sheet?

Reference no: EM13215790

Questions Cloud

Estimate the proportion of defective parts : The production manager wants to estimate the proportion of defective parts received from this supplier. She believes the proportion defective is no more than 0.15 and wants to be within 0.04 of the true proportion of defective parts with a 90% lev..

How to prepare a monthly schedule of cash receipts : Seventy percent of Ellis' sales are on credit with 60 percent of receivables collected in the month after the sale and the rest of receivables collected in the second month after the sale.

Explain the preferred stock is cumulative and participating : Assuming that the company has retained earnings of $85,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive.

Explain what was the original annual rate of return : What was the original annual rate of return needed to reach your goal when you started the fund two years ago? With only $140,000 in the fund and 10 years remaining until your first child starts college, what annual rate of return would the fund ha..

What are the warranty expense balances for 2014 and 2015 : Merritt Equipment Company sells computers for $1,790 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2014, the company sold 850 computers.

Long-term and any-occupation disability policy available : Deshawn Carter has just received his open-enrollment notification and has asked you to assess his disability insurance coverage. He currently has a long-term, any-occupation disability policy available through his employer that pays a benefit of 8..

The bonds payable would be included in which component : The bonds were issued at par, and the government intends to service the bonds from Enterprise Fund revenues. At year-end, none of the bond proceeds have been spent. The bonds payable would be included in which component of net assets.

What pressure would be required to decrease volume of gas : A container with 644 mL of oxygen gas is at a pressure of 11.6 kPa. What pressure would be required to decrease the volume of the gas to 439 mL, assuming no temperature change?

User Account

All Pages