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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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Answer:

shifts the short-run Phillips curve up

Explanation:

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7 0
3 years ago
What is an incentive for a person to contribute to an IDA? It earns the highest interest rates available at a bank. It is good f
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The correct answer for the question that is being presented above is this one: "An organization matches the amount deposited." An incentive for a person in order to contribute to an IDA is that an organization matches the amount deposited.
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Id say its A, because entrepreneurs start a business to make a profit.

5 0
3 years ago
Beginning inventory, purchases and sales data for tennis rackets are as follows:
IRISSAK [1]

Answer:

Cost of goods sold = $836

Ending inventory = $315

Explanation:

a) Data and Calculations:

Date     Description    Units  Unit Price  Balance

Apr. 1    Inventory         12         $45       $540

Apr. 11  Purchase          13         $47       $1,151 ($540 + 13 * $47)

Apr. 14 Sale                 (18)      $100        $315 ($7 * $45)

Sales revenue = $1,800 ($100 * 18)

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b) Under the LIFO (Last in, First out) inventory valuation method, it is assumed that goods that were purchased closest to the selling date were the ones to be sold while those purchased earlier remain in inventory.

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2 years ago
Recently, Verizon Wireless ran a pricing trial in order to estimate the elasticity of demand for its services. The manager selec
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Answer:Yes, the Manager made an error.

Explanation:

Increasing the revenue of a firm depends on two factors which are price and effective demand. An increase in price without a fall in demand will increase revenue, an increase in demand without a fall in price will equally increase revenue.

However when manipulating price only in order to increase revenue care must be taken to ensure same or higher level of demand for an increase in price which lead to a fall in demand may boomerang for the firm.

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The above illustrate an increase in price without a rise or maintaining the same level of demand leads fall in revenue.

8 0
3 years ago
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