Answer: a. $0
b. $7,760
c. $1,440
d. $1,200
Explanation:
a. The family have a $500 a year deductible so the $200 will go out from there.
The insurer will therefore pay $0.
b. The remaining Deductible of $300 ( 500 - 300) will be applied to this.
There is also the 80% Coinsurance clause which means the insurer will pay for 80% of the losses. In total the Insurance company will pay,
= (10,000 - $300) * 80%
= 9,700 * 80%
= $7,760
c. The Deductible has been used up so the Insurance company pays 80% of the loss.
= 80% * 1,500
= $1,200
However, the Stop-loss provision of $2,500 kicks in. This is the maximum amount that the family is to pay for any losses during the year.
So far on January 1 2013 and July 1 2013 they have paid,
= 200 + (10,000 - 7,760)
= $2,440
The maximum left till the family pays the maximum is,
= 2,500 - 2,440
= $60
The family will therefore pay only $60 meaning that the insurer will cover,
= 1,500 - 60
= $1,440
d. This is a new year so the Deductible resets back to $500.
Insurer will therefore pay,
= (2,000 - 500) * 80%
= 1,500 * 80%
= $1,200
Answer:
A. $575,000 + $125,000 - $560,000
Explanation:
According to the ending inventory report, cost of sales would be calculated as follow;
Cost of sales = Beginning inventory + Purchase - Ending inventory
Cost of sales = $575,000 + $125,000 - $560,000
Answer and Explanation:
The journal entries are shown below:
a. On Jan 31
Warranty expense Dr ($173,000 × 6%) $10,380
To Product Warranty payable $10,380
(Being the warranty expense is recorded)
For recording this we debited the warranty expense as it increased the expenses and credited the product warranty payable as it also increased the liabilities
b. On Aug 15
Product Warranty payable $397
To Supplies $230
To wages payable $167
(Being the product warranty payable is recorded)
For recording this we debited the product warranty payable as it decreased the liabilities and the supplies and wages payable is credited as it decreased the assets and increased the liabilities
Answer:
A
Explanation:
If the company has introduced a loyalty program, customers are less likely to patronise other business. Thus, the threat of new entrants is reduced as firms would be less likely to enter into the industry knowing there is a high degree of customer loyalty to company XYZ
