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PilotLPTM [1.2K]
3 years ago
11

Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and

to provide the necessary repair labor. During 2014, the corporation sells for cash 451 computers at a unit price of $3,110. On the basis of past experience, the 2-year warranty costs are estimated to be $159 for parts and $209 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2014.) The warranty is not sold separately from the computer.1. Record any necessary journal entries in 2014, applying the cash-basis method.2. Record any necessary journal entries in 2014, applying the expense warranty accrual method.3. What liability relative to these transactions would appear on the December 31, 2014, balance sheet and how would it be classified if the expense warranty accrual method is applied?4. In 2015, the actual warranty costs to Brooks Corporation were $24,040 for parts and $41,080 for labor. Record the journal entry in 2015, applying the cash-basis method. Use "Inventory" account to record the warranty expense.
5. In 2015, the actual warranty costs to Brooks Corporation were $24,040 for parts and $41,080 for labor. Record the journal entry in 2015, applying the expense warranty accrual method. Use "Inventory" account to record the warranty expense.
Business
1 answer:
Anettt [7]3 years ago
6 0

Answer and Explanation:

Brooks Corporation

1. The 2014 cash-basis journal entries will be:

Date Description Debit Credit

2014

DR Cash $1,402,610

($3,110 x 451)

CR Sales Revenue $1,402,610

No Journal entry is recorded for the possible warranty expense in a situation where the cash-basis is used.

2. The 2014 accrual method journal entries will be:

Date Description Debit Credit

2014

DR Cash $1,402,610

CR Sales Revenue $1,402,610

2014

DR Warranty expenses 165,968

($368 x 451)

CR Accrued Warranty Expense 165,968

3. On December 31, 2014, financial statements, there will be an Accrued Warranty Liability in which it will be classified as a current liability unless in a situation where the company can reasonably estimate which portion will be spent in the second year of the warranty period, in which case that portion can be classified as a long-term liability.

4. The 2014 cash-basis journal entries will be:

Date Description Debit Credit

2015

DR Warranty Expense 65,120

CR Wages Expense 41,080

CR Inventory 24,040

5. The 2014 accrual method journal entries will be:

Date Description Debit Credit

2015

DR Accrued Warranty Expense 65,120

CR Wages Expense 41,080

CR Inventory 24,040

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The table below represents how Marco feels about chocolate candy bars.
Inessa05 [86]

Answer:

A. Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils

0 0 —

1 25 25

2 42 17

3 54 12

4 62 8

5 66 4

6 65 –1

2. Soda

Explanation:

A.Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils)

0 0 —

1 25 25

2 42 17

3 54 12

4 62 8

5 66 4

6 65 –1

1. In a situation where the consumption go up from 0 to 1, this means that total utility will from 0 to 25.

Therefore the , marginal utility will be 25 (25 – 0).

2. Total utility will be 42(25+17)

3. Marginal utility will be 12 (54-42)

4. The total utility for quantity of 5 is 66, while the marginal utility is 4.

Hence the total utility will be 62 (66 – 4) while marginal utility will be 4(12-8)

6. Total utility will be 65(66-1)

B. Based on( A )above Marco already has two candy bars, which gave him a total utility of 42 this means that when we Add soda his utility would increase to 64 (42 + 22)

And in a situation where he consumes four candy bars which is 2 candy bars + another 2 extra candy bars this means his utility will be only 62.

Based on this Soda will be the preferred one

5 0
3 years ago
Bengal Co. provides the following unit sales forecast for the next three months: July August September Sales units 5,000 5,700 5
Aloiza [94]

Answer:

The budgeted production of the units for the month of July are 5,175 units

Explanation:

The budgeted production of the units for the month of July is computed as:

Budgeted production units for July = July units + 25% of August units - Ending inventory of June

where

July units is 5,000 units

August units is 5,700

So, 25% will be:

= 5,700 × 25%

= 1,425

Ending inventory of June is 1,250 units

So, putting the units above:

Budgeted production units for July = 5,000 units + 1,425 units - 1,250 units

Budgeted production units for July = 6,425 units - 1,250 units

Budgeted production units for July = 5,175

8 0
3 years ago
Define working capital. How is working capital computed?
Phoenix [80]

Working capital is calculated by subtracting current liabilities from current assets shown on a company's balance sheet. Current assets include cash, accounts receivable and inventories. Current liabilities include accounts payable, taxes, wages and accrued interest.

Working capital is calculated by subtracting current assets from a company's current liabilities. For example, if a company has current assets of $100,000 and current liabilities of $80,000, its working capital is $20,000.

To calculate the working capital requirement, the following formula can be used: Working Capital (WC) = Current Assets (CA) – Current Assets (CL).

Learn more about working capital here:brainly.com/question/19804046
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8 0
1 year ago
Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referr
Furkat [3]

Answer:

Open end

Explanation:

Open end otherwise known as mutual fund are those investments offered through fund companies which sells shares directly to investors. In an open end fund investment, there is no limit to the number of shares that can be offered therein. The shares traded are unlimited which means that shares can be issued in as much can be backed up with funds.

The prices for open end funds are fixed once daily which shows the performance of the investment for that day hence the only price at which investment shares can be bought for that day.

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3 years ago
A manager is concerned that there isn’t enough time spent on production and too much time spent on setups. The manager decides t
Katarina [22]

The impact would be that the average size of the inventory will increase.

If the manager has decided to double the production batch size then the average size of the inventory will also increase.

<h3>What is an inventory? </h3>
  • In general terms an inventory refers to all the goods, items, products, which are a part of the business organization.
  • For different industries the inventories have different meanings.
  • Manufacturing industry: the inventory is not only the finished or the final product but also the raw materials are included.
  • Service industry: the inventory of the service industry includes the steps involved in the sales of the product.
  • Raw materials, finished goods, work that is in process etc.. all of this is inventory.
  • Inventory is an important asset for all businesses and it is important to understand the meaning of it.

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6 0
1 year ago
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