User Account

All Pages

Why should a company accrue warranty expenses

Assignment Help Financial Accounting
Reference no: EM132982413

Greg Johnson, after completing the adjusting for his new company, Poly-Fix, was called to meet with the company controller to discuss his proposed entries. Greg assumed that the controller was questioning his efforts as he was asked to bring his notes, calculations, and supporting documentation. He soon learned that his assumption was incorrect and that his boss wanted him to reconsider one of the adjusting entries for an estimated expense.

  • Poly-Fix is a new company, specializing in commercial fasteners. Their products have a long-term warranty against manufacturing defects. Greg's boss feels that 3 percent of sales is too high for their warranty expense estimate. This is a new product that has yet to be tested, and the company president is under pressure from their lenders to meet projected income and profit levels.

Problem 1: Should Greg change his warranty expense estimate? Why or why not?

Problem 2: Why should a company accrue warranty expenses? Explain.

Problem 3: Who might be impacted by a decision to revise the estimate? How might they be impacted?

Problem 4: What is the impact of revising a warranty expense estimate? Explain.

Reference no: EM132982413

Questions Cloud

How much will profit increase : Variable cost for archi inc are 25% of sale. It's selling price is $100 per unit. If archi sale one unit more than break -even unit. How much profit increase
What is the company after-tax wacc : The beta of the company's common stock is 0.60. What is the company's after-tax WACC, assuming that the company pays tax at a 35% rate
How might internal environment impact external opportunity : How is it possible that one firm could see a condition in the external environment as an opportunity while a second firm sees it as a threat?
What most of the people in community require : What most of the people in your community require. How could this be a threat for the organization and an opportunity for another organization in the community?
Why should a company accrue warranty expenses : Why should a company accrue warranty expenses? Explain. What is the impact of revising a warranty expense estimate? Explain.
What will balance of courier six ltd share capital account : Once all of the options related transactions have been recorded , what will the balance of Courier Six Ltd share capital account be?
List and explain the components of the ratios : List and explain the components of the ratios that would be the most important for you to analyze before making an investment decision
What is the significance of income tax accounting : Question - What is the significance of income tax accounting and why it is disclosed in the financial statements and reports
Solve weighted average number of shares for sonic ltd : Calculate the weighted average number of shares outstanding for 2020 if all dilutive securities are converted into ordinary shares at the beginning of the year

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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