Seller's obligation to replace or correct a product (or service) that fails to perform as expected within a specified period. To conform with the matching principle, the seller reports the expected warranty expense in the period when revenue from the sale is reported.
<h3>What are sales?</h3>
- Sales are actions involving the sale of goods or the volume of items sold during a specified time frame.
- A sale also includes the provision of a service for a fee.
- In response to an acquisition, appropriation, request, or a direct connection with the customer at the point of sale, the seller or provider of the products or services completes a sale.
- Title (property or ownership) of the object is transferred, and a price is settled, meaning a price is agreed upon for which the ownership of the item will transfer.
<h3>Why are sales important?</h3>
- A sale is a transaction in which two or more people trade goods, services, or other assets for cash.
- Sales often occur when a seller and a buyer exchange items or assets for money or other assets.
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Answer:
Lundholm, Inc
Journal Entries
Date Account Titles Debit Credit
May 1, 18 Cash $500,000
Bonds payable $500,000
(To record the bond issuance)
31 Oct, 18 Interest Expenses $22,500
(500000*9%*6/12)
Cash $22,500
(To record payment of the first semiannual period’s interest)
Nov 1, 19 Bonds payable $300,000
Loss on Bonds $3,000
Cash $303,000
(To record retirement the bonds at 101 on November 1, 2019)
If a company pays most of the major payments through cash it means its cash flow will be reduced due to the company’s working capital will also reduce but the current liabilities will remain unchanged.
Cash flow includes in Current assets of the company and is considered to be the strength of the company's working capital. therefore with the cash payments company's current assets will reduce and this reduction weakens working capital.
For example, Individual A pays most of the payments through cash and his current assets are being reduced due to that his working capital would also reduce with its cash flow but the liabilities will remain unchanged as they are long-term debt.
Liabilities are of more than a year or about a year due to that they’ll not affect the current assets of the company and this will not affect its working capital.
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Answer:
Follows are the solution to this question:
Explanation:
In point a)
In point (b)
In point (c):
It would also be cheaper to buy a grocery from a local supermarket club because every ounce is for $0.08 while every ounce is for $0.09 in a sales club.