b Compute the amounts of any liability for compensated absences that should be

B compute the amounts of any liability for

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b)  Compute the amounts of any liability for compensated absences that should be      reported on the balance sheet at December 31, 2010 and 2011. 2010 2011 Vacation Sick Pay Vacation Sick Pay Wages Wages Wages Wages Payable Payable Payable Payable Jan 1 Bal: $0  $0  $8,640  $1,728   + accrued 8,640 (1) 5,184 9,360 5,616  - paid 0 -3,456 -7,776 -4,536 Dec. 31 bal $8,640  $1,728  (2) ### (3) $2,808  (4) (1) 9 employees X $12.00/hr. X 8 hrs./day X 10 days =  $8,640  (2) 9 employees X $12.00/hr. X 8 hrs./day X (6–4) days = $1,728  (3) 9 employees X $12.00/hr. X 8 hrs./day X (10–9) days =   $864  9 employees X $13.00/hr. X 8 hrs./day X 10 days =   9,360 $10,224  (4) 9 employees X $13.00/hr. X 8 hrs./day X (6 + 6 – 4 – 5) days $2,808 
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Exercise 13-11  Warranties Selzer Equipment Company sold 500 Rollomatics during 2010 at $6,000 each. During 2010, Selzer spent $30,000 servcing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. Instructions a)  Prepare 2010 entries for Selzer using the expense warranty approach.     Assume  that Selzer estimates the total cost of servicing the warranties will     be $120,000 for 2 years. Cash 3,000,000       Sales (500 X $6,000) 3,000,000 Warranty Expense 30,000       Cash, Inventory, Accrued Payroll 30,000 Warranty Expense 90,000       Estimated Liability Under Warranties  90,000        ($120,000 – $30,000) b)  Prepare 2010 entries for Selzer assuming that the warranties are not an integral      part of the sale. Assume that of the sales total, $160,000 relates to sales of      warranty contracts. Selzer estimates the total cost of servicing the warranties      will be $120,000 for 2 years. Estimate revenues earned on the basis of costs      incurred and estimated costs. Cash 3,000,000       Sales 2,840,000       Unearned Warranty Revenue 160,000 Warranty Expense 30,000       Cash, Inventory, Accrued Payroll 30,000 Unearned Warranty Revenue 40,000       Warranty Revenue  40,000          [$160,000 X ($30,000/$120,000)]
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Problem 13-2  (Liability Entries and Adjustments) Listed below are slected transactions of Schultz Department Store for the current year ending December 31. Instructions: Prepare all the journal entries necessary to record the transactions noted above as as they occurred and any adjusting entries relative to the transactions that would be required to present fair faincnail statements at December 31. Date each entry. For simplicity, assume that adjusting entries are recorded only once a year on December 31. 1)  On December 5, the store received $500 from the Jackson Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15.
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