HW_8 Answers - Exercises(5-15 min E 8-16 Req 1 Journal DATE...

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Exercises (5-15 min.) E 8-16 Req. 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Warranty Expense ($150,000 × .06)….. 9,000 Estimated Warranty Payable……… 9,000 Estimated Warranty Payable…………. 9,400 Cash…………………………………… 9,400 Req. 2 INCOME STATEMENT Sales revenue……………………………………… $150,000 Warranty expense………………………………… 9,000 BALANCE SHEET Current liabilities Estimated warranty payable ($8,000 + $9,000 $9,400) ……………… ..... $ 7,600 Req. 3
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Estimated warranty payable, a current liability, will cause a company’s current ratio to decrease .
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(10-15 min.) E 8-17 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Aug. 31 Cash…………………………………………. 1,560 Unearned Subscription Revenue……. 1,500 Sales Tax Payable ($1,500 × .04) …….. 60 Dec. 31 Sales Tax Payable………………………… 60 Cash………………………………………. 60 31 Unearned Subscription Revenue………. 500 Subscription Revenue ($1,500 × 4/12) 500 BALANCE SHEET
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