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kozerog [31]
3 years ago
12

On 1/1/27, Frankfort Company sold 100 components at $700 each. All sales were cash sales. Estimated total cost servicing the com

ponents was $1,300 each year of the three-year-warranty. Frankfort spent $1,400 servicing the components in 2027. This is considered an assurance-type warranty. Using the Expense Warranty approach, what is the 12/31/27 Warranty Liability
Business
1 answer:
DiKsa [7]3 years ago
6 0

Answer:

the 12/31/27 Warranty Liability is $2,500

Explanation:

An assurance type warranty gives a customer assurance that the Good or Service will function or work as intended.

There is no option on the customer to take the warranty or not. Therefore, an assurance type warranty is not a separate performance obligation for revenue recognition.

Assurance type warranties are accounted for in terms of IAS 37 : Provisions.

<u>Entries that Frankfort Company will have made Using the Expense Warranty approach will be :</u>

Date : 1/1/27

Debit : Warranty Expense $1,300

Credit : Warranty Provision $1,300

<em>Providing for amount it will cost the entity in 2027</em>

Date : 12/31/27

<u>1st increase the provision</u>

Debit : Warranty Expense $100

Credit : Warranty Provision $100

<u>then utilize the provision</u>

Debit : Warranty Provision $1,400

Credit : Cash $1,400

When warranty claim is subsequently received

Conclusion :

Warranty liability remaining = $3,900 - ($1,300 + $100)

                                              = $2,500

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Briefly describe the evolution of partnering. discuss the forces that contributed to this approach to selling.
tiny-mole [99]
There are 4 stages in the evolution of partnering represented by 4As. First is ADVISE, in this stage you express your interest in becoming his partner and communicate the intention of your product/business. Next is ACCLIMATE, this stage is when your potential partner understands the product/business. Then, ACTIVATE. This stage is when you start planning strategies with your partner on how to sell the product. Lastly, ACCELERATE your strategies into reaching greater consumer market. 
6 0
3 years ago
Victor is the recipient of $1 million from a lawsuit. Victor decides to use the money to purchase a small business in Florida. H
ryzh [129]

Answer:

Economic profit = -$25,000    option c

Opportunity cost = $175,000  option d

Accounting profit to allow for zero economic profit = $175,000 Option c

Explanation:

<em>Economic profit is the difference between revenue and implicit cost. Implicit cost is the sum of out-of-pocket accounting cost and opportunity cost.</em>

<em>opportunity csot is the value of the benefit sacrificed in favour of a decision.</em>

Economic profit = Accounting profit - opportunity cost

Opportunity cost for victor includes

1. The $100,000 per year which he would have earned had he invested the  money in a bond

2. The annual salary of $75000 he forfeited

Total opportunity cost = 100,000 + 75,000= $175,000

Economic profit = 150,000 -175,000 = -$25,000

To attain an economic profit of zero , the accounting profit ought to be the same at the opprotunity cost of $175,000

Economic profit = -$25,000    option c

Opportunity cost = $175,000  option d

Accounting profit to allow for zero economic profit = $175,000 Option c

7 0
3 years ago
Information collected from online databases is an example of ________ data. A) observationalB) experimentalC) primaryD) secondar
ikadub [295]

Answer:

The correct answer is letter "D": secondary.

Explanation:

Secondary data is the information gathered by other individuals or organizations and is used as a reference in studies or researches. This type of data is typically easy and cheap to obtain because does not imply establishing a team to collect the information needed and can be found in accessible places such as libraries or even on the internet.

8 0
3 years ago
On January 1, 2021, for $17.9 million, Seashells Company issued 8% bonds, dated January 1, 2021, with a face amount of $19.9 mil
bearhunter [10]

Answer:

Cash A/c Dr.                   $796,000

Discount A/c Dr.            $99,000

To,  Interest Revenue         895,000

Explanation:

According to the scenario, computation of the given data are as follows,

Face value = $19.9 million

Issued bond rate = 8% annually or 4% semi annual

So, Cash = $19,900,000 × 4%

= $796,000

Issued bonds value = $17.9 million

Market yield = 10% annual or 5% semi annual

So, Interest revenue = $17,900,000 × 5%

= $895,000

So, Journal entries are as follows,

Jun.30,2021 Cash A/c Dr.                   $796,000

                       Discount A/c Dr.            $99,000

                          To,  Interest Revenue         895,000

                   (Being interest revenue on June30 is recorded)

5 0
2 years ago
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