In 2021, Dwayne left his current job and opened his own store called Dwayne's Dishwashers. In the

Fantastic news! We've Found the answer you've been seeking!

Question:

In 2021, Dwayne left his current job and opened his own store called Dwayne's Dishwashers. In the first year they had sales of dishwashers totaling $350,000. These dishwashers come with a one-year warranty. For minor customer claims on the warranty, Dwayne will hire a repair company to fix the dishwashers. If the defect is substantial, Dwayne will replace the customer's dishwasher with a new one.

Based on his many years as a dishwasher repairman, Dwayne believes that 3% of the dishwasher sales is an appropriate estimate of the cost of the warranty claims. During 2021, Dwayne ended up replacing 14 dishwashers, each costing $500. In addition, Dwayne had his repairment fix a number of minor issues which cost him another $2,000.

REQUIRED:

1) Assume Dwayne records all entries relating to warranties at December 31 each year. Record all these entries for 2021. 2) What is the warranty liability at December 31, 2021?

____________________________________________________________________________________

Rachel works at Central Perk as a server serving coffee and pastries. There are two other servers that work there as well. The caf opened up when Covid-19 restrictions lifted and Central Perk was very busy so the three servers each worked 50 hours/wk for the last two weeks of the January. The servers each make $18/hour for straight-time (40 hours per week) and time and a half for any hours above that.

Gunther is a very caring boss at Central Perk and pays the following benefits for each staff member: $5 weekly into an RRSP, $10 weekly for healthcare benefits. The servers want to help out during this pandemic where possible so each of them has $10 withheld off each pay cheque that is donated to a local charity dedicating efforts to help with Covid-19 support. All servers are subject to income tax at 20%, CPP at 5.45% and EI at 1.58%.

REQUIRED: Record Central Perk's accruals for all employees' payroll at January 31, and record the payment to employees and remittances to CRA on Feb 2. (Hint: how many employees are there??)