Module 1 Quiz 2
Module 1 Quiz 2
QUIZ 1.2
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Problem #1:
On April 1, 2018, Keem Both Company began offering a new product for sale
under a one-year warranty. Of the 5,000 units in inventory at April 1, 2018,
3,000 had been sold by June 30, 2018. Based on its experience with similar
products, the entity estimated that the average warranty cost per unit sold
would be P80. Actual warranty costs incurred from April 1 through June 30,
2018 were P70,000. On June 30, 2018, what amount should be reported as
estimated warranty liability?
Problem #2:
Keri Bells Company sells its product under a one-year warranty. For the year,
it sold 20,000 units. Based on its experience with similar products, the entity
estimated that 35% of the units sold will be returned for repair. The average
warranty cost per unit sold would be P120. Actual warranty costs incurred
were P470,000. On December 31, 2018, what amount should be reported as
estimated warranty liability?
Problem #3:
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Problem #4:
Problem #5:
Problem #6:
Forever Shop sells its product under a one-year warranty. For the year, it sold
4,000 units. Based on its experience with similar products, the entity
estimated that 40% of the units sold will be returned for repair. The average
warranty cost per unit sold would be P70. Actual warranty costs incurred
were P95,000. On December 31, 2018, what amount should be reported as
estimated warranty liability?
Problem #7:
During 2017 Beal Company became involved in a tax dispute with the BIR.
On December 31, 2017, the entity’s tax advisor believed that an unfavorable
outcome was probable and the best estimate of additional tax was P500,000,
but could be as much P650,000. after the 2017 Financial Statements were
issued, Beal Company received and accepted a BIR settlement offer of
P550,000. what amount of accrued liability should be reported on December
31, 2017?
Problem #8:
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Problem #9: