Required information
[The following information applies to the questions displayed below.]
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $16 and its retail selling price is $70 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 5% of dollar sales. The following transactions and events occurred.
2016
Nov. 11 Sold 70 razors for $4,900 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $14,700 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry.
2017
Jan. 5 Sold 140 razors for $9,800 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry.
2. How much warranty expense is reported for November 2016 and for December 2016?
Warranty expense for November 2016 Warranty expense for December 2016 $
3. How much warranty expense is reported for January 2017?
Warranty expense $
4. What is the balance of the Estimated Warranty Liability account as of December 31, 2016?
Estimated warranty liability balance $
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2017?
Estimated warranty liability balance $
Required information
[The following information applies to the questions displayed below.]
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $16 and its retail selling price is $70 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 5% of dollar sales. The following transactions and events occurred.
2016
| Nov. | 11 | Sold 70 razors for $4,900 cash. | ||
| 30 | Recognized warranty expense related to November sales with an adjusting entry. | |||
| Dec. | 9 | Replaced 14 razors that were returned under the warranty. | ||
| 16 | Sold 210 razors for $14,700 cash. | |||
| 29 | Replaced 28 razors that were returned under the warranty. | |||
| 31 | Recognized warranty expense related to December sales with an adjusting entry. |
2017
| Jan. | 5 | Sold 140 razors for $9,800 cash. | ||
| 17 | Replaced 33 razors that were returned under the warranty. | |||
| 31 | Recognized warranty expense related to January sales with an adjusting entry. |
2. How much warranty expense is reported for November 2016 and for December 2016?
| Warranty expense for November 2016 | |
| Warranty expense for December 2016 | $ |
3. How much warranty expense is reported for January 2017?
| Warranty expense | $ |
4. What is the balance of the Estimated Warranty Liability account as of December 31, 2016?
| Estimated warranty liability balance | $ |
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2017?
| Estimated warranty liability balance | $ |
Related questions
[The following information applies to the questionsdisplayed below.]
On October 29, 2014, Lobo Co. began operations by purchasingrazors for resale. Lobo uses the perpetual inventory method. Therazors have a 90-day warranty that requires the company to replaceany nonworking razor. When a razor is returned, the companydiscards it and mails a new one from Merchandise Inventory to thecustomer. The company's cost per new razor is $14 and its retailselling price is $80 in both 2014 and 2015. The manufacturer hasadvised the company to expect warranty costs to equal 6% of dollarsales. The following transactions and events occurred. |
| 2014 |
| Nov. | 11 | Sold 80 razorsfor $6,400 cash. |
| 30 | Recognizedwarranty expense related to November sales with an adjustingentry. | |
| Dec. | 9 | Replaced 16razors that were returned under the warranty. |
| 16 | Sold 240 razorsfor $19,200 cash. | |
| 29 | Replaced 32razors that were returned under the warranty. | |
| 31 | Recognizedwarranty expense related to December sales with an adjustingentry. |
| 2015 |
| Jan. | 5 | Sold 160 razorsfor $12,800 cash. |
| 17 | Replaced 37razors that were returned under the warranty. | |
| 31 | Recognizedwarranty expense related to January sales with an adjustingentry. |
1a. Prepare journal entries to record these transactions andadjustments for 2014.
1b. Prepare journal entries to record these transactions andadjustments for 2015.
2. How much warranty expense is reported for November 2014 andfor December 2014?
3. How much warranty expense is reported for January 2015?
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15 ACCOUNT QUESTIONS! I NEED HELP WITH ASAP! THANK YOU SOMUCH!
1. A company reported total stockholders' equity of $290,000 onits Dec 31, 2015, balance sheet. The following information isavailable for the year ended Dec 31, 2016:
Revenues | $620,000 |
Expenses | 330,000 |
Liabilities, on December 31, 2016 | 144,000 |
3. Samores Company sold merchandise on account for $3,000 toCookie Company with credit terms of 2/10, n/30. Five days later,Cookie Company returned $1,000 of merchandise that was damaged,along with a check to settle the account.
What entry does Samores Company make upon receipt of thecheck?
Select one:
A.
Cash | 1,960 | ||
Sales Returns and Allowances | 1,040 | ||
Accounts Receivable | 3,000 | ||
B.
Cash | 2,000 | ||
Accounts Receivable | 2,000 | ||
C.
Cash | 1,960 | ||
Sales Returns and Allowances | 1,000 | ||
Sales Discounts | 40 | ||
Accounts Receivable | 3,000 | ||
D.
Cash | 2,940 | ||
Sales Discounts | 60 | ||
Accounts Receivable | 3,000 | ||
What are the total assets of the company on December 31,2016?
Select one:
A. $420,000
B. $184,000
C. $724,000
D. $ 38,000
8. The following inventory was available for sale during theyear for Thomasina Tools:
Beginning inventory | 10 units at $80 |
First purchase | 15 units at $110 |
Second purchase | 30 units at $140 |
Third purchase | 20 units at $130 |
Thomasina Tools has 25 units on hand at the end of the year.
What is the dollar amount of inventory at the end of the yearaccording to the first-in, first-out method?
Select one:
A. $3,300
B. $3,150
C. $3,900
D. $5,950
9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:
Beginning inventory | 10 units at $41 |
First purchase | 15 units at $55 |
Second purchase | 30 units at $70 |
Third purchase | 25 units at $65 |
Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.
What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $4,340
B. $9,920
C. $3,465
D. $6,200
12. Determine Sales revenue for Ozzie Company with the followingdata:
Cost of Goods Sold | $840,000 |
Operating Expenses | 210,000 |
Sales Discounts | 15,000 |
Sales Returns and Allowances | 97,500 |
Net Income | 265,000 |
Select one:
A. $1,192,500
B. $1,222,500
C. $1,417,500
D. $1,387,500
17. Determine Sales revenue for Ozzie Company with the followingdata:
Cost of Goods Sold | $840,000 |
Operating Expenses | 210,000 |
Sales Discounts | 15,000 |
Sales Returns and Allowances | 97,500 |
Net Income | 265,000 |
Select one:
A. $1,192,500
B. $1,222,500
C. $1,417,500
D. $1,387,500
18. M. Fields Company reported the following year-endamounts:
Total Sales | $33,600 |
Sales Discounts | 600 |
Sales Returns | ? |
Cost of Goods Sold | 21,000 |
Gross Profit | 4,350 |
What is the companyâs Sales Returns for the year?
Select one:
A. $ 7,650
B. $ 2,160
C. $10,860
D. $ 2,970
19. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:
Purchases During Sept 2016 | Sales During Sept 2016 | ||||
Sept 7 | 120 units @ $224 | Sept 12 | 70 units | ||
Sept 17 | 70 units @ $176 | Sept 22 | 110 units | ||
Sept 25 | 100 units @ $168 | Sept 29 | 90 units | ||
What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?
Select one:
A. $22,080
B. $26,480
C. $26,000
D. $28,640
24. On which financial statements would you look to find thetotal costs of merchandise that remains and the total that has beensold?
Select one:
A. Balance sheet and income statement
B. Statement of cash flows and balance sheet
C. Balance sheet and statement of cash flows
D. Statement of stockholders' equity and balance sheet
25. Which statement is true of the statement of stockholders'equity?
Select one:
A. It shows a company's stock issuances and dividends paid toshareholders.
B. It reports a company's assets, liabilities, and equities.
C. It reports a company's cash flows from operating activities,investing activities, and financing activities.
D. It reports a company's revenue and expenses for a period.
26. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:
Purchases During Sept 2016 | Sales During Sept 2016 | ||||
Sept 7 | 120 units @ $224 | Sept 12 | 70 units | ||
Sept 17 | 70 units @ $176 | Sept 22 | 110 units | ||
Sept 25 | 100 units @ $168 | Sept 29 | 90 units | ||
What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?
Select one:
A. $22,080
B. $26,480
C. $26,000
D. $28,640
27. The following hammers were available for sale during theyear for Waiculus Tools:
Beginning inventory | 10 units at $80 |
First purchase | 15 units at $100 |
Second purchase | 30 units at $120 |
Third purchase | 25 units at $130 |
Waiculus Tools has 30 hammers on hand at the end of theyear.
What is the dollar amount of cost of goods sold for the yearaccording to the first-in, first-out method?
Select one:
A. $3,150
B. $3,950
C. $5,300
D. $3,900
29. Nickster Company purchased $8,000 worth of merchandise, FOBshipping point. Transportation costs were an additional $700. Thecompany later returned $1,500 worth of merchandise and paid theinvoice within the 2% cash discount period.
The total amount paid for this merchandise is:
Select one:
A. $7,040
B. $8,526
C. $7,070
D. $7,056
30. The following amounts and costs of platters were availablefor sale by Utah Pottery during 2016:
Beginning inventory | 10 units at $82 |
First purchase | 15 units at $110 |
Second purchase | 30 units at $140 |
Third purchase | 25 units at $130 |
Utah Pottery has 35 platters on hand at the end of the year.
How much is cost of goods sold in dollars at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $5,580
B. $3,465
C. $9,920
D. $3,720
31. Current assets are usually listed in the order of their:
Select one:
A. Lack of liquidity: least liquid to most liquid
B. Size: smallest to largest
C. Liquidity: most liquid to least liquid
D. Size: largest to smallest
34. Which of the following assets would not be classified as acurrent asset?
Select one:
A. Supplies
B. Equipment
C. Accounts receivable
D. Prepaid rent
| The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Wright Company. Additional information from Wright's accounting records is provided also. |
| WRIGHT COMPANY Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) | ||||
| 2016 | 2015 | |||
| Assets | ||||
| Cash | $ | 109 | $ | 70 |
| Accounts receivable | 110 | 115 | ||
| Short-term investment | 52 | 24 | ||
| Inventory | 115 | 110 | ||
| Land | 82 | 100 | ||
| Buildings and equipment | 615 | 480 | ||
| Less: Accumulated depreciation | (163) | (115) | ||
| $ | 920 | $ | 784 | |
| Liabilities | ||||
| Accounts payable | $ | 35 | $ | 43 |
| Salaries payable | 6 | 8 | ||
| Interest payable | 7 | 5 | ||
| Income tax payable | 7 | 11 | ||
| Notes payable | 0 | 27 | ||
| Bonds payable | 234 | 180 | ||
| Shareholders' Equity | ||||
| Common stock | 355 | 280 | ||
| Paid-in capitalâexcess of par | 161 | 140 | ||
| Retained earnings | 115 | 90 | ||
| $ | 920 | $ | 784 | |
| WRIGHT COMPANY Income Statement For Year Ended December 31, 2016 ($ in 000s) | ||||
| Revenues: | ||||
| Sales revenue | $ | 460 | ||
| Expenses: | ||||
| Cost of goods sold | $ | 210 | ||
| Salaries expense | 67 | |||
| Depreciation expense | 48 | |||
| Interest expense | 17 | |||
| Loss on sale of land | 4 | |||
| Income tax expense | 64 | 410 | ||
| Net income | $ | 50 | ||
| Additional information from the accounting records: | |
| a. | Land that originally cost $18,000 was sold for $14,000. |
| b. | The common stock of Microsoft Corporation was purchased for $28,000 as a short-term investment not classified as a cash equivalent. |
| c. | New equipment was purchased for $135,000 cash. |
| d. | A $27,000 note was paid at maturity on January 1. |
| e. | On January 1, 2016, bonds were sold at their $54,000 face value. |
| f. | Common stock ($75,000 par) was sold for $96,000. |
| g. | Net income was $50,000 and cash dividends of $25,000 were paid to shareholders. |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepare the statement of cash flows of Wright Company for the year ended December 31, 2016. Present cash flows from operating activities by the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 5,000 should be entered as 5).) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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