14 which of the following is included in the entry to record estimated warranty paya 4306986

14 which of the following is included in the entry to record estimated warranty paya 4306986

14) Which of the following is included in the entry to record estimated warranty payable?

A) a credit to Estimated Warranty Payable

B) a credit to Merchandise Inventory

C) a credit to Warranty Expense

D) a debit to Estimated Warranty Payable

15) Jumbo Sales offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2013, Jumbo had $595,000 of sales. In the same year, Jumbo paid out $8,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense?

A)

Estimated Warranty Payable

8,500

          Cash

8,500

B)

Warranty Expense

8,500

          Estimated Warranty Payable

8,500

C)

Warranty Expense

17,850

          Estimated Warranty Payable

17,850

D)

Warranty Expense

17,850

          Sales Revenue

17,850

16) Jumbo Sales offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2013, Jumbo had $595,000 of sales. In the same year, Jumbo paid out $8,500 of warranty payments. Which of the following is the entry needed to record the disbursement of warranty payments?

A)

Estimated Warranty Payable

8,500

          Cash

8,500

B)

Warranty Expense

8,500

          Estimated Warranty Payable

8,500

C)

Warranty Expense

17,850

          Estimated Warranty Payable

17,850

D)

Warranty Expense

17,850

          Sales Revenue

17,850

17) Sara Digital starts the year with $2,500 in its Estimated Warranty Payable account. During the year, there were $210,000 of sales and $4,500 of warranty repair payments. Sara Digital estimates warranty expense at 2% of sales.

The journal entry to record this will include a debit to Warranty Expense for:

A) $4,200

B) $4,500

C) $2,500

D) $2,200

18) Sara Digital starts the year with $2,500 in its Estimated Warranty Payable account. During the year, there were $210,000 of sales and $4,500 of warranty repair payments. Sara Digital estimates warranty expense at 2% of sales. At the end of the year, what was the balance in the Estimated Warranty Payable account?

A) $4,200 debit

B) $4,500 credit

C) $2,500 debit

D) $2,200 credit

19) Bike World offers warranties on all their bikes. They estimate warranty expense at 3.5% of sales. At the beginning of 2013, the Estimated Warranty Payable account had a credit balance of $1,200. During the year, Bike World had $295,000 of sales, and had to pay out $5,300 in warranty payments. How much Warranty Expense will be reported on the 2013 income statement?

A) $6,225

B) $6,500

C) $9,125

D) $10,325

20) Bike World offers warranties on all their bikes. They estimate warranty expense at 3.5% of sales. At the beginning of 2013, the Estimated Warranty Payable account had a credit balance of $1,200. During the year, Bike World had $295,000 of sales, and had to pay out $5,300 in warranty payments. At the end of the year, what is the closing balance in the Estimated Warranty Payable accounts?

A) $6,225

B) $6,500

C) $9,125

D) $10,325

21) Ragas Inc. sold goods worth $50,000 in the year 2013 and estimated 4% warranty expense for the year. Customers complained of defects and goods worth $1,500 had to be replaced. Which of the following is the correct the journal entry for honoring the warranties with goods?

A)

Estimated Warranty Payable

1,500

            Cash

1,500

B)

Estimated Warranty Payable

1,500

            Merchandise Inventory

1,500

C)

Warranty Expense

1,500

            Merchandise Inventory

1,500

D)

Estimated Warranty Payable

1,500

            Warranty Expense

1,500

22) Royal Clothes has performed admirably for the financial year 2014. It decides to reward its employees with a bonus of 15% on annual net income, after deducting the bonus. The net income before allowing bonuses is $300,000. Calculate the bonus allowable to the employees.

A) $45,000

B) $39,130

C) $52,941

D) $6,750

23) Tryst Inc. has a policy of accruing $1,500 for every employee as a vacation benefit. Sarah, an employee, took a vacation. Which of the following is the correct journal entry for the vacation benefit paid?

A)

Vacation Benefit Payable

1,250

            Vacation Benefit Expense

1,250

B)

Vacation Benefit Expense

1,500

            Cash

1,500

C)

Vacation Benefit Payable

1,500

            Cash

1,500

D)

Vacation Benefit Expense

1,250

            Vacation Benefit Payable

1,250

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