1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
torisob [31]
3 years ago
8

Streep Factory provides a 2-year warranty with one of its products which was first sold in 2017. Streep sold $1,000,000 of produ

cts subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Business
1 answer:
Brut [27]3 years ago
4 0

Answer:

accounts receivable   1,000,000 debit

   sales revenues                       1,000,000 credit

------------------------------

warrant  expense    125,000 debit

        warrant liability              125,000 credit

-----------------------------

warranty liability       70,000 debit

             Inventory                       70,000 credit

Explanation:

The sales will be recorded as usual

Then we will recognize based on the company's expectation a warrant liability for 125,000 and a warrant expense for the same value

When the customer claims the warrant we will decrease the liaibility and also inventory as we are replacing the good so it is inventory account which decreases.

The reason why we do this treatment is to avoid charging expenses for the 2017 sales i nthe subsequent period (2019 and 2019) which vilates the matching principles.

You might be interested in
Screening Model. Assume that the following criteria relevant to the process of screening various project opportunities are weigh
goldfiish [28.3K]

Answer:

Project Alpha 81

Project Beta 81

Project Gamma 83

Project Delta 81

Among the four projects the most likely candidates to be implemented will

be Project Gamma .

Explanation:

Screening Model

1.Calculation for Project Alpha

Important Weight×Weight Score = Weighted Score

Quality 5 × 1 =5

Cost 3 ×7 =21

Speed 7 ×5 =35

Visibility 5 ×3= 15

Reliability 1× 5 =5

Total Score =81

2.Important Weight ×Weight Score = Weighted Score

Calculation for Project Beta

Quality 5 × 3 =15

Cost 3 ×7 =21

Speed 7× 5 =35

Visibility 5×1 =5

Reliability 1 ×5 =5

Total Score =81

3.Important Weight ×Weight Score = Weighted Score

Calculation for Project Gamma

Quality 5 ×3 =15

Cost 3 ×5 =15

Speed 7× 3= 21

Visibility 5×5 =25

Reliability 1×7 =7

Total Score=83

4.Important Weight ×Weight Score = Weighted Score

Calculation for project Delta

Quality 5 ×5 =25

Cost 3 ×3 =9

Speed 7× 5 =35

Visibility 5×1 =5

Reliability 1 ×7 =7

Total Score =81

Therefore among the four projects the most likely candidates to be implemented will

be Project Gamma because it has the highest

score with a score of 83.

6 0
3 years ago
BD Corporation has purchased new computers to modernize the office. The increased efficiency from the computers will lead to inc
Inessa [10]

Answer:

BD Corporation should not purchase the new computers

Explanation:

initial outlay year 0 = -$300,000

increased productivity per year = $75,000 for years 1-5

discount rate = 8%

NPV = -$300,000 + $75,000/1.08 + $75,000/1.08² + $75,000/1.08³ + $75,000/1.08⁴ + $75,000/1.08⁵ = -$300,000 + $69,444.44 + $64,300.41 + $59,537.42 + $55,127.24 + $51,043.74 = -$300,000 + 299,453.25 = -$546.75

since NPV is negative, then the project should be rejected

we can also use an annuity factor to determine the present value of this annuity, PV = $75,000 x 3.9927 = $299,452.50

NPV = -$300,000 + $299,452.50 = -$547.50

5 0
3 years ago
An animator needs a laptop for audio/video editing, and notices that he can pay $2600 for a Dell XPS laptop, or lease from the m
Goshia [24]

Answer:

Cost of leasing over buying is $144.59

Explanation:

For computing the cost of leasing the laptop over buying it outright, we have to calculate the present value is shown below:

Given that,  

Future value = $0

Rate of interest = 14%  ÷ 12 months = 1.17%

NPER = 4 years  × 12 month = 48 months

PMT = $75

The formula is shown below:

= PV(Rate;NPER;-PMT;FV;type)

So, after solving this, the present value is $2,744.59

And, the buying amount is $2,600

So, the difference is

= $2,744.59 - $2,600

= $144.59

3 0
3 years ago
Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual
LenaWriter [7]

Answer:

The investment that will have the highest future value is option b.

Explanation:

First lets suposse the effective annual rate is 10%  

a. Future value= $2,500  

c. First you must obtain the net present value of all cash flows with the formula attached, for example:  

NVP= ($250/(1+10%)^1)+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10  

With the excel formula "NPV" you can calculate the net present value specifying the interest rate, the cash flows.  

The NPV= $1,536.14  

And then you calculate the future value of this answer with this formula:  

VF=VP(1+i)^n  

VF= $1,536.14*(1+10%)^10  

VF=$3,984.36  

b. If payments are due at the beginning of every year means that at year 0 you start with $250. You must calculate the NPV in this way  

NPV= $250+($250/(1+10%)^1)+ )+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10  

NPV= $1,786,14

And then you calculate the future value of this answer:

VF= $1,786,14*(1+10%)^10  

VF=$4,632.79

d. First, you must convert the annual interest rate into semi-annually interest

10% Annually effective is 4,88% Semi-anually effective

NPV=$125+($125/(1+4,88%)^1)+ )+($125/(1+4,88%^2)+($125/(1+4,88%^3)... and so on until period 20

NPV=$1,698.75

And then you calculate the future value of this answer:

VF= $1,698 *(1+10%)^10  

VF=$4,405.37

The investment that will have the highest future value is option b.

3 0
3 years ago
Costs such as security deposit,inspections, attorney or broker fees are examples of blank
Tom [10]
Managing money. Hope this. Helps
4 0
1 year ago
Read 2 more answers
Other questions:
  • Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership i
    13·1 answer
  • Expert Computers was started in 2018. The company experienced the following accounting events during its first year of operation
    10·1 answer
  • Which of the following scenarios describes an offer?a.Raoul asks Wendy if she would be willing to sell her first-edition copy of
    9·1 answer
  • John and Jill Jones sold stock that resulted in a short-term capital loss of $5,000. They had no other capital transactions duri
    11·1 answer
  • Do you agree with Unilever’s decision to link its brands with efforts to encourage healthy and environmentally sustainable behav
    9·1 answer
  • Bernard is a board member at Lopez Electronics Inc. He is also a senior executive of the firm. The board is chaired by Ernest Jo
    9·1 answer
  • When companies purchase technology from Conversica to reduce the variability of the human component of their service offerings,
    7·1 answer
  • On June 30, 2020, Pier1 Inc. issued 500 shares of $1 common stock for $15 per share. On June 30, 2020, Pier5 Inc. reacquired 100
    9·1 answer
  • If a company incorrectly records cash received for services to be provided in the future with a debit to cash and a credit to sa
    13·1 answer
  • an arrangement a manufacturer makes with a reseller to handle only its products and not those of competitors is called a(n)
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!