EX 10-23 Accrued Product Warranty Obj. 5 General Motors Company (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable Noncurrent estimated product warranty payable Total $3,769 $3,048 6,005 5,193 $9,774 $8,241 Assume that GM's sales were $127,204 million in the current year and that the total paid on warranty claims during the current year was $3,249 million. Why are short- and long-term estimated warranty liabilities separately disclosed? Journalize the adjusting entry for the current year's product warranty expense. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

EX 10-23 Accrued Product Warranty Obj. 5 General Motors Company (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable Noncurrent estimated product warranty payable Total $3,769 $3,048 6,005 5,193 $9,774 $8,241 Assume that GM's sales were $127,204 million in the current year and that the total paid on warranty claims during the current year was $3,249 million. Why are short- and long-term estimated warranty liabilities separately disclosed? Journalize the adjusting entry for the current year's product warranty expense. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.23EX

See similar textbooks

Similar questions

Accrued Product Warranty Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: (in millions) Current estimated product warranty payable Noncurrent estimated product warranty payable Year 2 $16,211 9,860 $26,071 Year 1 $15,542 8,690 $24,232 Total Presume that Lachgar's sales were $211,240 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $16,712 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Year 2 product warranty expense. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Accrued Product Warranty General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Year 2 Year 1 Current estimated product warranty payable $3,059 $2,884 Noncurrent estimated product warranty payable 4,327 4,147 Total $7,386 $7,031 Presume that GM's sales were $135,592 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands on the business relative to the quick current assets and other longer-term demands . Feedback Review the need for a classified balance sheet. b. Provide the journal entry for the Year 2 product warranty expense. Product Warranty Expense Product Warranty Payable
Accrued Product Warranty Lachgar Industries disclosed estimated product warranty payable for comparative years as follows: ( in millions) Year 2 Year 1 Current estimated product warranty payable $11,272 $10,808 Noncurrent estimated product warranty payable 6,856 6,043 Total $18,128 $16,851 Presume that Lachgar’s sales were $146,889 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $11,621 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash on the business relative to the quick current assets and other longer-term . b. Provide the journal entry for the Year 2 product warranty expense. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
Accrued Product Warranty Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $11,050 $10,595 Noncurrent estimated product warranty payable 6,721 5,924 Total $17,771 $16,519 Assume that Harbour's sales were $130,324 million in current Year and that the total paid on warranty claims during the current year was $11,392 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term . b. Provide the journal entry for the current Year product warranty expense. Enter your answers in millions. If an amount box does not require an entry, leave it blank. fill in the blank d3bc3bf67fec01d_2 fill in the blank d3bc3bf67fec01d_3 fill in the blank…
Accrued Product Warranty Harbour Company disclosed estimated product warranty payable for comparative years as follows: (in millions) Current Year Prior Year Current estimated product warranty payable $14,047 $13,467 Noncurrent estimated product warranty payable 8,544 7,530 Total $22,591 $20,997 Assume that Harbour's sales were $165,663 million in current Year and that the total paid on warranty claims during the current year was $14,481 million. a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash the business relative to the quick current assets and other longer-term b. Provide the journal entry for the Current Year product warranty expense. Enter your answers in millions. c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?
EXERCISE 7 Filmore Company started selling a new product that carried a 2-year warranty against defects. The warranty provides assurance that the new product will function as intended based on agreed-upon specifications. Based on past experiences with other products, the estimated warranty costs related to peso sales are computed as follows: First year of warranty 3% Second year of waranty 5% Total sales and actual warranty repairs for 2019 and 2020 are given: 2019 2020 P 4,200,000 Actual warranty expenditures 148,800 Sales P 6,960,000 180,000 REQUIRED: a.) What amount should Fillmore report as its estimated warranty liability as of December 31,2020? b.) Based on the above data, assuming that sales and repairs occur evenly throughout the year, how much would be the predicted warranty expense covering 2019 and 2020 sales still under warranty at December 31,2020?
Question 31 Nelsie Corporation has an outstanding 60- day 6% note receivable armounting to P 15.000 dated December 1 of the current yoar. The company is using the calendar yoar in preparing its financial statomonts. What account should be creditod and what is the amount? Interest Income, P 75 Interest Income, P 900 Oc Accrued Interest Income, P 150 Unearmed Interest Income, P150
Quèstion 12 Classic Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 4% of sales revenue. In 2018, the company had $602,000 of sales. In the same year, it paid out $12,000 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable O Warranty Expense Estimated Warranty Payable O Estimated Warranty Payable 24,080 24,080 18,060 18,060 12,000 Cash 12,000 O Warranty Expense 18,060 Sales Revenue 18,060
Chapter Comprehensive CP 9‐7 Zebra Corp. commenced operations on January 1, 2019. It estimates warranty expense as 1% of yearly sales. During June 2019 it satisfied warranty claims as follows: Parts from inventory $2,000 Salaries paid in cash 500 The 2019 warranty claims amounted to $22,000 (including the entry above) and 2019 sales revenue was $2 million. Required: Record the June warranty claims of $2,500. Record the 2019 warranty expense. Calculate the balance in the estimated warranty liability account at December 31, 2019. Comment on your calculations. Descriptions and general ledger account numbers are not necessary. Show calculations where applicable.
Question Content Area Assuming a 360-day year, when a $15,586, 90-day, 7% interest-bearing note payable matures, total payment will be a.$1,091 b.$16,677 c.$15,859 d.$273
Exercise 7 Interest-bearing Note. A company accepted a trade note from AB Merchandising, face value P3,000, 15 percent interest-bearing, dated August 18, maturing in 180 days. Assume 360 days in a year. Required: Sixty days prior to the maturity of the note, the company endorsed the note with recourse (discounted) to YZ Finance Company at a 9 percent annual rate. Compute the following: (a) The company's proceeds from the note. P (b) The company's interest earned (net of discount). P (c) Give the journal entry for the company to record the discounting transaction, assuming that the end of their fiscal year is June 30. The discontinuing is to be recorded as a sale. Assume interest revenue was not recorded before the discounting.
Saved Exercise 9-4 Interest-bearlng notes payable with year-end adjustments LO P1 Keesha Co. borrows $235,000 cash on November 1 of the current year by signing a 90-day, 11%, $235,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 and 3 Req 4 What is the amount of interest expense in the current year and the following year from this note? (Use 360 days a year. Round final answers to the nearest whole dollar.) es Interest Total through maturity Interest Expense Current Year Expense Following Year Principal Rate (%) Time Total interest