week 6 accounting homework

Document Content and Description Below

Requirement 1. Report these items on Robarge Electronics' balance sheet at June 30, 2018. First, select the balance sheet accounts. Refer to the information to determine which accounts will be class... ified as current liabilities, and which will be classified as long-term liabilities. Remember, current liabilities are due within one year of the balance sheet date. Robarge Electronics Balance Sheet (partial) June 30, 2018 Account Current liabilities: Accrued warranty payable Current portion of long-term note payable Interest payable Unearned sales revenue Employee withheld income tax payable FICA tax payable Total current liabilities Long-term liabilities: Note payable a. Sales of are subject to an accrued warranty cost of %. The accrued warranty payable at the beginning of the year was , and warranty payments for the year totaled . $2,000,000 8 $31,000 $56,000 Many companies provide warranties with their products. A warranty guarantees that a company will repair or replace a product or provide a refund for it if it is found to be defective within a certain period of time. The expense recognition (matching) principle requires a company to record the warranty expense for a product in the same period that the business records the product's sales revenue. After all, the warranty motivates customers to buy products, so the company must record the warranty expenses related to the products when they are sold. At the time of the sale, however, the company doesn't know which products are defective. The exact amount of warranty expense cannot be known with certainty, so the business must estimate warranty expense and the related accrued liability. Now calculate the warranty expense. The business uses an estimate usually based on prior history. Electronics estimates that warranty costs, or expense, will be % of sales revenue. (Enter the interest rate as a whole number. [Show More]

Last updated: 1 year ago

Preview 1 out of 4 pages