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stich3 [128]
3 years ago
9

A company switched from the cash basis to the accrual basis for recognizing warranty expense. The unrecorded liability for warra

nties was $1.6 million at the beginning of the year. Its tax rate is 35%. The company booked a year-end warranty liability of $3 million. As a result of this change, the firm would:
Business
1 answer:
Ostrovityanka [42]3 years ago
6 0

Answer:

Report a prior period adjustment decreasing retained earnings by $1,040,000

Explanation:

Report a prior period adjustment decreasing retained earnings by $1,040,000

Dr Retained earnings $1,040,000

Dr Deferred tax liability $560,000

(35%×$1,600,000)

Cr Estimated warranty liability $1,600,000

Therefore As a result of this change, the firm would Report a prior period adjustment decreasing retained earnings by $1,040,000

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2 years ago
Speculative investments are high-risk investments with the possibility of high returns in a short period of time.
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8 0
3 years ago
Read 2 more answers
The demand for loanable funds depends on future income.<br><br> a. True<br> b. False
aliina [53]

Answer:

The answer is "Option b".

Explanation:

The Loanable funds are the amount of all the assets that individuals and companies have agreed to save and lend to creditors instead of for personal use, as an investment.

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6 0
3 years ago
Suppose that in your first year of college you spend $21,800.00 more than you earn. In your second year, your expenses increase
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Explanation:

8 0
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Required: Journal entry
lisabon 2012 [21]

Answer:

If a cheque was being issued to settle a account payable, the relevant entry is to debit the accounts payable account to show that the debt is being reduced. You will then credit the cash account to show that cash is being reduced as well because it was used to pay off the debt.

Date                    Account Title                                           Debit               Credit

XX-XX-XXXX     Accounts Payable - Saurya Stores     Rs. 39,000

                           Cash                                                                            Rs. 39,000

7 0
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