Listed below are selected items from the financial statements of a company for the year ended December 31, Year 1.
|Current Maturity of Long-Term Debt||25,000|
|Bonds payable, due December 31, Year 20||2,200,000|
|Premium on Bonds Payable||14,000|
|Estimated Warranty Liability||10,000|
|Note Payable, due Dec. 31, Year 4||75,000|
|Note Payable, due June 1, Year 2||8,000|
|Discount on Note Payable due June 1, Year 2||500|
A company estimates the cost of products warranties to be 3% of sales. The beginning balance in Estimated Warranty Liability account is $15,000. Sales for the period was $795,000. During the period, $32,600 was actually paid for warranty related costs. What is the ending balance in the Warranty Liability account?
A company provides a warranty on its products that it sells to customers. The warranty liability account had $1,200 balance on April 1. The company had sales of $67,000 in April and estimated warranty repairs at 3% of sales. During the month, the company actually paid out $2,400 for warranty repairs.
Determine the April 30 balance in the estimated warranty liability account.
On January 1, Year 1, Mission Company agreed to buy some equipment from Anna Company. Mission signed a non-interest-bearing note, agreeing to pay Anna $500,000 for the equipment on December 31, Year 3. The implied rate of interest for this note was 10%.
Record the journal entry for the purchase of this equipment for Mission Company on January 1, Year 1.
|Journal Entry 1|