Journal P11-28A Warranty & Contingent Liab..........
Question # 00029128
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Updated on: 10/24/2014 09:33 AM Due on: 11/21/2014
P11-28A Journalizing liability transactions
The following transactions of Brooks Garrett occurred during 2014:
Apr. 30 Garrett is party to a patent infringement lawsuit of $200,000. Garrett’s attorney is certain it is remote that Garrett will lose this lawsuit.
Jun. 30 Estimated warranty expense at 2% of sales of $400,000.
Jul. 28 Warranty claims paid in the amount of $6,000.
Sep. 30 Garrett is party to a lawsuit for copyright violation of $100,000. Garrett’s attorney advises that it is probable Garrett will lose this lawsuit. The attorney estimates the loss at $100,000.
Dec. 31 Garrett estimates warranty expense on sales for the second half of the year of $500,000 at 2%.
Requirements
1. Journalize required transactions, if any, in Garrett’s general journal. Explanations are not required.
2. What is the balance in Estimated Warranty Payable?
The following transactions of Brooks Garrett occurred during 2014:
Apr. 30 Garrett is party to a patent infringement lawsuit of $200,000. Garrett’s attorney is certain it is remote that Garrett will lose this lawsuit.
Jun. 30 Estimated warranty expense at 2% of sales of $400,000.
Jul. 28 Warranty claims paid in the amount of $6,000.
Sep. 30 Garrett is party to a lawsuit for copyright violation of $100,000. Garrett’s attorney advises that it is probable Garrett will lose this lawsuit. The attorney estimates the loss at $100,000.
Dec. 31 Garrett estimates warranty expense on sales for the second half of the year of $500,000 at 2%.
Requirements
1. Journalize required transactions, if any, in Garrett’s general journal. Explanations are not required.
2. What is the balance in Estimated Warranty Payable?
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Rating:
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Solution: Journal P11-28A Warranty & Contingent Liab..........