Use the following information for the next two (2) questions: Henry Co., a machinery dealer, sells...

Transcribed Image Text:

Use the following information for the next two (2) questions: Henry Co., a machinery dealer, sells a machine for P22,200 under a 1 year warranty contract that requires the company to replace all defective parts and to provide the necessary repair labor at no cost to the customer. With sales being made evenly throughout the year, Henry sells for cash 600 machines in 2016 (half of the warranty expense is incurred in 2016 and half in 2017). On the basis of past experience, the 1 year warranty costs are estimated to be P510 parts and P660 labor. Assume that in 2016, these warranty costs are incured exactly as estimated. 18) What amount of warranty expense would be charged against 2016 revenue? A. 702,000 B. 351,000 C. 153,000 D. 19) What amount of warranty liability would appear on the December 31, 2016, statement of financial position? C. 153,000 A. 702,000 B. 351,000 D. Use the following information for the next two (2) questions: Henry Co., a machinery dealer, sells a machine for P22,200 under a 1 year warranty contract that requires the company to replace all defective parts and to provide the necessary repair labor at no cost to the customer. With sales being made evenly throughout the year, Henry sells for cash 600 machines in 2016 (half of the warranty expense is incurred in 2016 and half in 2017). On the basis of past experience, the 1 year warranty costs are estimated to be P510 parts and P660 labor. Assume that in 2016, these warranty costs are incured exactly as estimated. 18) What amount of warranty expense would be charged against 2016 revenue? A. 702,000 B. 351,000 C. 153,000 D. 19) What amount of warranty liability would appear on the December 31, 2016, statement of financial position? C. 153,000 A. 702,000 B. 351,000 D.

Answer rating: 100% (QA)

18 A 702000 19 B 351000 Warranty Expense Computation Wn 1 Part... View the full answer