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Lady_Fox [76]
3 years ago
5

Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with a 1-year warranty. Maintenan

ce on each copier during the warranty period is estimated to be $330. Instructions Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2020. Actual warranty costs (inventory) incurred in 2020 were $17,000.
Business
2 answers:
Usimov [2.4K]3 years ago
7 0

Answer:

Amount                                                          Debit                      Credit

Cash                                                               $800,000

 Sales Revenue                                                                            $800,000

Warranty Expense                                         $17,000

    Cash                                                                                          $17,000

Warranty expense                                         $49,000

    Warranty liability                                                                      $49,000

Explanation:

Given:

Price For each copier=$4,000

Number of copiers sold=200

Maintenance cost on each copier during warranty=$330

Actual Warranty cost=$17,000

Required:

Prepare entries.

Solution:

Amount                                                          Debit                    Credit

Cash ($4,000*200)                                       $800,000

 Sales Revenue ($4,000*200)                                                    $800,000

Warranty Expense                                         $17,000

    Cash                                                                                              $17,000

Warranty expense[($330*200)-17,000]       $49,000

    Warranty liability                                                                         $49,000

tester [92]3 years ago
6 0

Answer:

Explanation: Journal Entries for the sale.

DR: Bank/Cash. $800,000

CR: Sales. $783,000

CR: Warranty on sales. $17,000

Being sales of 200 color printers at $4,000 per piece.

DR: warranty expense. $330

CR: Warrant on sales. $330

Being actual expense incurred on warranty for year 2020

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The PV of future cash flow is $22,925,764, therefore the company should take on the project

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In order to know if the company should take on the project we have to calculate the PV of future cash flow as follows:

PV of future cash flow=<u>    D1    </u>

                                        RE-g

To calculate this formula we requre to calculate the WACC and the discount rate as follows:

WACC=(1.00/1.80×0.11)+0+(0.80/1.80×0.046)

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WACC=0.081556

WACC=8.16%

After having calculated the WACC we can calculate the project discount rate as follows:

project discount rate=WACC + Additional risk factor

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Therefore, PV of future cash flow= <u>$2,100,000</u>

                                                            0.1116-0.02

PV of future cash flow= <u>$2,100,000</u>

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Explanation:

A product item is a specific version of a product that can be designated as a distinct offering among an organization's products. A product line is a group of closely related products offered by an organization.

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Costs of goods sold - $9,600

Explanation:

Under the LIFO Method, the cost of good sold equals to

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= 300 units × $22 + 150 units × $20

= $6,600 + $3,000

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Since the firm has sold 450 units, so out of which 300 units sold at a price of $22 and the remaining 150 units sold at a price of $20

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