Apple Project 2 - Alfred Mai Econ 3A TA Tues at 6 Final...

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Alfred Mai Econ 3A TA: Tues at 6 02-27-08 Final Accounting Project # 2 PART 1 A. The Company generally provides for the estimated cost of hardware and software warranties at the time the related revenue is recognized. The Company assesses the adequacy of its preexisting warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates. For products accounted for under subscription accounting pursuant to SOP No. 97-2, the Company recognizes warranty expense as incurred. Accrual Warranties Beginning Balance: 284 Cost of warranty claims: 281 Accruals for product warranty: 227 Ending balance: 230 Journal Entries Account Debit Credit Accrual Warranty 281 Cost of Warranty Claims 281 Product Warranty 227 Accrual Warranty 227 B. The original cost of PPE is $2841. The accumulated depreciation as of year-end 2007 is $1009. C. Accrual basis of accounting is when revenue and expense is not recorded or recognized at the same time as the related cash flow. Cash basis of accounting records and recognizes revenue and expense when cash is received and paid. Apple's net income for the fiscal year 2007 is $3496. Apple generated
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