Chapter 13: Question 23Q (page 691)
Explain the accounting for a service-type warranty.
Service type warranties are additional services provided apart from assurance and separately customer pays for the additional service. They are accounted under IFRS 15.
Over 22 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
How is present value related to the concept of a liability?
(Equity Method) On January 1, 2017, Pennington Corporation purchased 30% of the common shares of Edwards
Company for \(180,000. During the year, Edwards earned a net income of \)80,000 and paid dividends of $20,000.
Instructions
Prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company
in 2017.
(Equity Investment) Oregon Co. had purchased 200 shares of Washington Co. for \(40 each this year (Oregon
Co. does not have significant influence). Oregon Co. sold 100 shares of Washington Co. stock for \)45 each. At year-end, the price
per share of the Washington Co. the stock had dropped to $35.
Instructions
Prepare the journal entries for these transactions and any year-end adjustments.
(Multiple-Step and Single-Step Statements) Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride Company (\(000 omitted).
Administrative expense
Officers’ salaries \)4,900
Depreciation of office furniture and equipment \(3,960
Cost of goods sold \)60,570
Rent revenue \(17,230
Selling expense
Delivery expense \)2,690
Sales commissions \(7,980
Depreciation of sales equipment \)6,480
Sales revenue \(96,500
Income tax \)9,070
Interest expense $1,860
Instructions
Under what conditions should a provision be recorded?
What do you think about this solution?
We value your feedback to improve our textbook solutions.
