For the financial year ending 30 June 2020, Malkin Ltd has some liability issues for which...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For the financial year ending 30 June 2020, Malkin Ltd has some liability issues for which it seeks your help: a) The company sells widgets and provides a one-year warranty. 100,000 widgets were sold for the year ended 30 June 2020, and 150,000 are expected to be sold next year. 2% of units sold are estimated to require warranty work, at an average cost of $3 per unit. Actual repairs incurred for units sold in the year just ended were $1,800. In the unadjusted trial balance, the Warranty Provision account has a $1,200 debit balance. i) Prepare the AJE required to update the Warranty Provision. ii) What balance should be shown for Warranty Provision on the 30 June 2020 Balance Sheet? b) Employees are paid $2,980 cash in hand every two weeks (wages and salaries), representing 10 days of work. At the same time, $1,200 of PAYE is withheld by Malkin Ltd, which it will pay to the IRD on the employees' behalf. 30 June was on a Tuesday, and the last payroll run was the previous Friday (26 June). Employees do not work weekends. Prepare the AJE required on 30 June. c) Malkin Ltd's management is having trouble distinguishing provisions, contingent liabilities, and liabilities such as accounts or notes payable. Explain to Malkin Ltd's management the key differences between these three categories, including their reporting implications, e.g., recognition or not; if not, what then? For the financial year ending 30 June 2020, Malkin Ltd has some liability issues for which it seeks your help: a) The company sells widgets and provides a one-year warranty. 100,000 widgets were sold for the year ended 30 June 2020, and 150,000 are expected to be sold next year. 2% of units sold are estimated to require warranty work, at an average cost of $3 per unit. Actual repairs incurred for units sold in the year just ended were $1,800. In the unadjusted trial balance, the Warranty Provision account has a $1,200 debit balance. i) Prepare the AJE required to update the Warranty Provision. ii) What balance should be shown for Warranty Provision on the 30 June 2020 Balance Sheet? b) Employees are paid $2,980 cash in hand every two weeks (wages and salaries), representing 10 days of work. At the same time, $1,200 of PAYE is withheld by Malkin Ltd, which it will pay to the IRD on the employees' behalf. 30 June was on a Tuesday, and the last payroll run was the previous Friday (26 June). Employees do not work weekends. Prepare the AJE required on 30 June. c) Malkin Ltd's management is having trouble distinguishing provisions, contingent liabilities, and liabilities such as accounts or notes payable. Explain to Malkin Ltd's management the key differences between these three categories, including their reporting implications, e.g., recognition or not; if not, what then?
Expert Answer:
Answer rating: 100% (QA)
Llablitles are current obligation recognlzed by the Company arising from previou... View the full answer
Related Book For
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
Posted Date:
Students also viewed these accounting questions
-
Part A The Wholesale Ltd acquired 80 per cent of the shares of House Construction Ltd on 30 June 2020 for a consideration of $800,000. The share capital and reserves of House Construction Ltd at the...
-
As you examined in this week's Discussion, fair value measurements can influence financial reporting. For an accountant, it can also be considered a moving target, especially when values of certain...
-
The following information relating to the year ending 30 June 2016 for Penrith Ltd has been obtained from the companys records. Profit for year before further adjustments and tax Retained earnings (1...
-
What is the "presentation of self" and why is it important when we are looking at social interaction? explain
-
Suppose X is a Poisson random variable with PMF, Find the Chernoff bound for the tail probability, Pr (X no). Pr(k)=-exp(-), k= 0,1,2,
-
Graph the level curves in the first quadrant of the xy-plane for the following functions at heights of z = 0, z = 2, and z = 4. 2y X 3 Z
-
Costless Group has a subsidiary in France, ABC Stores. ABC Stores beginning and ending trial balances, in its functional currency, the euro, are below. Additional information (in thousands): 1. Plant...
-
Four transactions for Farmers Market and Repair Shop that took place in November 2016 appear below, along with the general ledger accounts used by the company. INSTRUCTIONS Record the transactions in...
-
How much total estimated costs will be allocated to the Vigan Branch? A. P155,250 B. P166,750 C. P177,250 D. P188,750. Sky Castle Finance Company had provided the following information about...
-
1 Leila Bannon, your supervisor and a fellow CPA, has been invited to participate in a symposium on ethics in the workplace. This event will bring together professionals from different fields who...
-
Noora DeLange is helping her company develop a marketing program for a new product line. The program involves emphasizing experience over acquisition and uses a marketing pitch that is less overt...
-
3. Prepare General Journal entries to accrue employee fringe benefit costs for the week. Assume that the company matches the employees' payments for medical insurance and contributes an amount equal...
-
Weller Company's budgeted unit sales for next year are provided below: Budgeted unit sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 26,000 27,000 19,000 24,000 The company's variable selling...
-
Discuss two ways in which a people professional can build inclusivity into a people practice initiative at the design stage, and two ways of checking inclusivity after a people practice initiative is...
-
A company has established that the relationship between the sales price for one of its product and the quantity sold per month is approximately p = 75 - 0.1D units (D is the demand or quantity sold...
-
Bostian, Inc. has total assets of $540,000. Its total debt outstanding is $185,000. The Board of Directors has directed the CFO to move towards a debtto-assets ratio of 55%. How much debt must the...
-
Match the term to the definition that best describes it Question 2 options: Has no preset spending limit; the balance must be paid in full every month An amount of money that is computerized, stored,...
-
Draw a Feynman diagram for the reaction n + v p + .
-
Contrast and compare CPM and PERT as project scheduling techniques.
-
Why is it important to define the system of interest before embarking on improvement Give three reasons.
-
It has been said that aggregate planning is related to personnel planning, budgeting, and market planning. Describe the nature of the relationship among these types of planning.
-
\(\frac{44}{75} \div \frac{484}{285}\) Perform the indicated operations. Reduce to lowest terms.
-
\(\left(\frac{1}{5} \div\left(\frac{3}{10}+\frac{11}{15} ight) ight) \times\left(\frac{2}{21}+\frac{5}{9} ight)-\left(\frac{8}{15} \div \frac{4}{33} ight)^{2}\) Perform the indicated operations....
-
\(\left(\frac{2}{5} \times\left(\frac{7}{8}-\frac{2}{3} ight) ight)^{2} \div\left(\frac{4}{9}+\frac{5}{6} ight)+\frac{7}{12}\) Perform the indicated operations. Reduce to lowest terms.
Study smarter with the SolutionInn App