Answer:
c. $3,750
Explanation:
Green Thumb Company provides two years warranty for any product defect. The provision needs to be made for the warranty expense and it should be reported in the balance sheet as warranty liability. The company budgets the warranty expense to be 2% in year of sales which is $2,400 ($120,000 * 2%) and 3% in the year after sale which is $1,350 ($45,000 * 3%). The total warranty liability for the year 2017 which will be reported at December 31, 2017 is $3,750.
Answer:
d. Work in Process 150,000 DEBIT
Wages Payable 150,000 CREDIT
Explanation:
The direct labor will the wages accrued for production orders. The general factory use will be part of the actual factory overhead. It should not be considered as direct labor. It is indirec tlabor, a component of manufactring overhead.
We debit work in process as it represent an assets, these units will be finished, sell and collected; completing the conversion cycle of assets.
While the wages are credited as thy represent an obligation to pay (liabilties)
The questions about risk that should someone ask before making economic choices are :
- What problem are most likely to happen ?
- What could go wrong ?
- What problem that could be most damaging ?
Hope this helps
Answer:
on 31st Dec 2019 the entry would be
Subscription Earned $14,850 ($59400*3/12) Debit
Unearned Subscriptions $ 44500( 59,400- 14,850) Debit
Cash $59,400 (credit)
