aimenathan_week7exercise.doc - American Public University...

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American Public University System ACCT100, Assignment 4 (Week 7 Exercises) Exercise 1 Identify which of the following would be classified as current liabilities as of December 31, 2010: 1. Wages Payable 2. Bonds Payable, maturing in 2015 3. Interest Payable, due July 1, 2011 4. Taxes Payable 5. Notes Payable, due January 30, 2012 Exercise 2 Maddox Company sells televisions with a 2-year warranty. Past experience indicates that 2% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is estimated to be $50 per unit. During 2010, 7,000 units were sold at an average price of $400. During the year, repairs were made on 55 units at a cost of $2,400. Instructions Prepare journal entries to record the repairs made under warranty and estimated warranty expense for the year. Dec.31 Warranty Expense Estimated Warranty Liability (To accrue estimated warranty costs) 7,000 7,000 Jan. 1- Dec.31,
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aimenathan_week7exercise.doc - American Public University...

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