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xeze [42]
3 years ago
12

Hitzu Co. sold a copier costing $6,500 with a two-year parts warranty to a customer on August 16, 2018, for $13,000 cash. Hitzu

uses the perpetual inventory system. On November 22, 2019, the copier requires on-site repairs that are completed the same day. The repairs cost $113 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on experience, Hitzu expects to incur warranty costs equal to 5% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.1. How much warranty expense does the company report in 2018 for this copier? 2. How much is the estimated warranty liability for this copier as of December 31, 2018? 3. How much warranty expense does the company report in 2019 for this copier? 4. How much is the estimated warranty liability for this copier as of December 31, 2019? 5. Prepare journal entries to record (a) the copier's sale; (b) the adjustment on December 31, 2018, to recognize the warranty expense; and (c) the repairs that occur in November 2019.
Business
2 answers:
klio [65]3 years ago
7 0
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kari74 [83]3 years ago
6 0

Answer:

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uigykyjgExplanation:

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xeze [42]

Answer:

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The mathematical or accounting formula of Present Value(PV)=\frac{FV}{(i+r)^{n} } where FV denotes the future cash payment to be made,r represents the discount rate and n is the number of years in which the future payment has to made.Here,the future cash payment of FV is given as $1350,the discount rate is 11% or 0.11 and the number of years in which the FV has to be paid is 9 years.

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