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BU397 (49)
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ch13_AddProb.pdf

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Department
Business
Course
BU397
Professor
Byron Williston
Semester
Fall

Description
value of this obligation was payable on September timates that the presenttaxes are levied on the sale amount to the d plus a 5 sales tax and 6 GST that must beits store parking lots at an estimated cost ofto be returned to the theatre company after it s for 22000 each as instalments on its current year on Players as a deposit on furniture that Jackson monthly rental payment plus 3 of all sales The having cash discount terms of 210 n30 from Haley a 15000 cash dividend that from Second Provincial Bank by signing a 92000 nonincome of 210000 Pings income tax rate is 25 ounts payable are recorded using the periodic system at net Limited for 50000 Purchases and accamounts after cash discounts The invoice was paid on February 26 signing a oneyear 12 note for the balance of the purchase price interestbearing note due one year from May 1 tax liability 10 to shareholders of record on August 31 Players is using in its stage production The deposit isreturns the furniture on January 15 GST of 6 were charged by the supplier on the purchase price remitted by the 15th day of the following month Bothcustomer payment is due one week after month end 100000 when the store is closed in two years Ping esat December 31 is 840002On April 1 Ping purchased a truck for 40000 from Smith Motors Limited paying 4000 cash and3On May 1 the company borrowed 800004On June 30 and December 31 Ping remitted cheque 5On August 14 the board of directors declared6On December 5 the store received 500 from Jacks 7On December 10 the store purchased new display cases for 9000 on account Sales tax of 5 and8During December cash sales of 83500 were recorde 9Pings lease for its store premises calls for a 2500 Problem 2The following are selected transactions of Ping Department Store Ltd for the current year ending December 3 11On February 2 the company purchased goods10Ping is required to restore the area surrounding one of 11The corporate tax return indicated taxable warranty against defects Basedles Sales and actual warranty Warranty Expendituresr sales are as follows first year after sale2 of at the warranty provision should be discounted If the the first year after sale end up being 4 of sales should report as warranty expense on its 20x9 income year after sale4 of saw would management account for this change Salesity on its December 31 20x9 balance sheet Assume that all sales are calculate the warranty expense for the years 20x7 through 20x8 Assumewith Solutions 20x7 8100006500 20x8 107000017200 2009 103600062000made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above statement and as a warranty liabilwhich is twice as much as was forecast Horelevant discount rate is 6 that all cash flows occur at yearendRequired aCalculate the amount that Cranmore CorporationbAssume that Cranmores warranty expenditures inc Assume now that the CFO at Cranmore believes th expenditures for the first three years of business wereon experience the estimated warranty costs related to dollasales second year after sale3 of sales and third Problem 1Cranmore Corporation manufactures a line of amplifiers that carry a threeyearBUSI 2002Intermediate Accounting II Chapter 13Current and NonFinancial Liabilities Additional Problemsrranty contract for 90 that after purchase average 25 perand 270 extended warranty pans The extended warranty begins the December 3 1 20x8 balance sheet e average threeyear extended warranty costs as 20 ation incurred actual costs relative to 20x8 television ation incurred the following costs relative to the y costs in the first year rate threeyear extended waice of 850 and they come with a standard oneyear mpany sold 300 televisionsccurred on December 31 20x8 and that all warranty costs on warranties would appear on the December 31 20x9 on warranties would appear on the December 31 201020x9 relative to the 20x8 television warranties2010 relative to the 20x8 television warranties odic services and replace defective d they be classified d they be classified 2000 for parts and 3000 for labour these transactions would appear on enly over the warranty period and how would they be classified balance sheet and how woulbalance sheet and how woulcontracts for cash Company records indicate that warrantone year after the purchase date During 20x8 the cowarranty The company also offers each customer a sepaProblem 3Selamou Corporation sells televisions at an average prrequires the company to perform periset 15 for parts and 10 for labour Selamou estimates thfor pans and 40 for labour Assume that all sales oare expected to be incurred ev Required Answer a and b based on the information aboveaRecord any necessary journal entries in 20x8 bWhat liabilities relative toAnswer c and d assuming that in 20x9 Selamou CorpordWhat amounts relative to the 20x8 televisiextended warranties sold in 20x8eRecord any necessary journal entries in fWhat amounts relative to the 20x8 televisiwarranty sales of 4410 for parts and 2940 for labourcRecord any necessary journal entries in Answer e and f assuming that in 2010 Selamou Corpor ons when they occurred and nce sheet and indicate thethat would be required to present fair financialrecord the above transactiported on the December 31 balalance sheet of primary significance to bankers any adjusting journal entries relative to the transactionsstatements at December 31 Date each entry amount of each one Required aPrepare all the journal entries that are necessary to bIdentify the current liabilities that will be recWhy is the liabilities section of the bawere 32200 for parts and a twoyear warranty that requires the corporation to e twoyear warranty costs are estimated to be 155 not sold separately from the equipment During 20x4 incurred by Brooks Corporation were 82300 for parts rred by Brooks Corporationwould appear on the December 31 20x4 balance sheet the necessary repair labour During 20x3 the corporation sells for cash 400 Problem 5Brooks Corporation sells portable computer equipment with replace defective parts and provide computers at a unit price of 2500 Based on experience thfor parts and 185 for labour per unit The warranty is 500 computers were sold for 2700 cash Warranty cost estimates were the same as for 20x3Assume that in 20x3 the actual warranty costs incu40300 for labour In 20x4 the actual warranty costs and 98000 for labourRequired aRecord the 20x3 and 20x4 journal entries bWhat liability relative to these transactionse to the premium plan iona private company who adopted e redeemable for a premium consisting of a childs company Repeat part a assuming that the retail ts at 150 each and sold 440000 boxes of Krusch emium offers the company estimates that 32 of the ies in a and b above be presented on the 20x8recorded in 20x8 relativmption During 20x8 105000 coupons are presented forbreakfast cereal Khamsah Corporattimated to be 260 each financial statements value of each puppet is esProblem 4To stimulate the sales of its KruschASPE places one coupon in each cereal box Five coupons arhand puppet In 20x8 the company purchased 31000 puppeat 350 a box From its experience with other similar prcoupons issued will be mailed back for rederedemptionRequired aPrepare the journal entries that should bec Assume now that Khamsah is a publicly accountablebHow would the accounts resulting from the entr
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