During December, Far West Services makes a $2,200 credit sale. The state sales t
ID: 2470230 • Letter: D
Question
During December, Far West Services makes a $2,200 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. Record sales and sales tax payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
record journal entry for sales and sales tax.
2.
Sony introduces a new compact music player to compete with Apple’s iPod that carries a two-year warranty against manufacturer’s defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 1% of sales. By the end of the first year of selling the product, total sales are $29.6 million, and actual warranty expenditures are $160,000. What amount (if any) should Sony report as a liability at the end of the year? (Enter your answers in dollars, not in millions.)
warranty liability is......
During December, Far West Services makes a $2,200 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. Record sales and sales tax payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
record journal entry for sales and sales tax.
2.
Sony introduces a new compact music player to compete with Apple’s iPod that carries a two-year warranty against manufacturer’s defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 1% of sales. By the end of the first year of selling the product, total sales are $29.6 million, and actual warranty expenditures are $160,000. What amount (if any) should Sony report as a liability at the end of the year? (Enter your answers in dollars, not in millions.)
warranty liability is......
Explanation / Answer
1.
2200x2.5% =55
2200x6% = 132
=55+132 = 187
Sales Tax Payable 187
2.
Warranty Expense = 29,600,000 x 1% = 296,000
Warranty Liability = 296,000 - 160,000 = 136,000
Warranty Liability at the end of the year is 136,000
Debit Credit Account Receivable 2,387 Sales 2,200 Sales Tax Payable 187Related Questions
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