chapter 11 key

Chapter 11 key - Chapter 11 Exercise 11-2(15 minutes[Note All entries dated 1 Warranty Expense Estimated Warranty Liability 5,440 5,440 To record

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Chapter 11 Exercise 11-2 (15 minutes) [ Note: All entries dated December 31, 2008.] 1. Warranty Expense. ................................................. 5,440 Estimated Warranty Liability. .......................... 5,440 To record warranty expense [4,000 units x 8% x $17]. 2. No adjusting entry can be made since the loss cannot be reasonably estimated. Disclosure of the suit as a contingent liability should be made in the notes to the financial statements. 3. Vacation Benefits Expense. .................................. 3,000 Vacation Benefits Payable. .............................. 3,000 To record vacation benefits expense [20 employees x 1 day x $150]. 4. No adjusting entry is required since it is not probable that the supplier will default on the debt. The guarantor, Casco Company, should describe the guarantee in its financial statement notes as a contingent liability. 5. Cash. ......................................................................... 787,500 Sales. .................................................................. 750,000 Sales Taxes Payable. ........................................ 37,500 To record sales and sales taxes. Cost of Goods Sold. ................................................ 500,000 Merchandise Inventory. .................................... 500,000 To record cost of sales. 6.
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This note was uploaded on 07/11/2011 for the course ECON 101 taught by Professor D during the Fall '11 term at Troy Dothan.

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Chapter 11 key - Chapter 11 Exercise 11-2(15 minutes[Note All entries dated 1 Warranty Expense Estimated Warranty Liability 5,440 5,440 To record

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