Module08Solutions

# Module08Solutions - Module 8 M8-16(15 minutes Balance Sheet...

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©Cambridge Business Publishers, 2008 Solutions Manual, Module 8 8-1 Module 8 M8-16 (15 minutes) Balance Sheet Income Statement Transaction Cash Asset + Noncash Assets = Liabil- ities + Contrib. Capital + Earned Capital Rev- enues Expen- ses = Net Income LTD 243 LS 9.5 Cash 252.5 243 9.5 253 LTD LS Cash To retire bonds at 101, remove unamortized discount and report loss on bond retirement* -252.5 Cash = -250 Long-Term Debt +7 Discount on Bonds -9.5 Retained Earnings +9.5 Loss on Bond Retirement = -9.5 * Retirement price = \$252,500 = \$250,000 × 101% Original discount = (100% – 96%) × \$250,000 = \$10,000 Unamortized discount = \$10,000 - \$3,000 = \$7,000 E8-23 (20 minutes) a. Total expected failures from units sold (69,000 × 0.02). ...... 1,380 Average cost per failure. .......................................................... × \$100 Total warranty expense for the current period . .................... \$138,000 b. Total expected failures from units sold (69,000 × 0.02). ...... 1,380 Units repaired during the period. ............................................ 1,000 Expected units left to be repaired. .......................................... 380 Average cost per failure. .......................................................... × \$100 Total warranty liability at end of current period . .................. \$38,000 At the end of the current period, Waymire will have a product warranty

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## This note was uploaded on 05/12/2010 for the course ACG 5065 taught by Professor Asare during the Spring '08 term at University of Florida.

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Module08Solutions - Module 8 M8-16(15 minutes Balance Sheet...

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