Hitzu Co. sold a copier (that costs $5,500) for $11,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $130 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier.
1. How much warranty expense does the company report for this copier in Year 1?
2. How much is the estimated warranty liability for this copier as of December 31 of Year 1?
3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?
4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Hitzu Co. sold a copier (that costs $5,500) for $11,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Green Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for warranties increased by $50,000. In addition, tax depreciation exceeded book depreciation by $100,000.
Answers (1)
Which of the following is consistent with advocates of rational expectations? If consumers fully anticipate an increase in interest rates, then:A. Real GDP will increase by the value of the multiplier B.
Answers (1)
The following information relates to the Quilt Division of TDS Corporation for last year: Sales $200,000 Contribution margin $90,000 Net operating income $65,000 Average operating assets $500,000 Minimum required rate of return 10% Assume that Quilt
Answers (1)
On february 1, pinn corp., paid $40,000 in advertising expenses for ads that will run in a periodical for the entire calendar year. on july 3, pinn paid $430,000 for anticipated major repairs to their machinery used for business.
Answers (1)
At the beginning of July, CD City has a balance in inventory of $2,850. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,750, terms 2/10, n/30.
Answers (1)
New Questions in Business
Identify an advertisement or commercial that targets only one of the generational groups. Describe the promotion in detail and identify the intended group.
Answers (1)
From the Farm Fruits, a company that produces and distributes organic fruits for grocery stores, wants to market its fruits in such a way that children will beg their parents to buy them.
Answers (1)
For a given constant required rate of return, the greatest portion of a preferred stockholder's return comes from increases in the price of preferred stock. a. True b. False
Answers (1)
A good investment should do one or both of which two things?
Answers (1)
Which of the following is a reason franchising has become popular in recent years? A) Franchise owners are free to set their own rules and operating standards, but they benefit from national ad programs ...
Answers (1)