Question
Requirement 1. Journalize required transactions, if any, in Bowes's general journal. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries. For transactions that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.)
Apr. 30: Bowes is party to a patent infringement lawsuit of $ 230,000. Bowes's attorney is certain it is remote that Bowes will lose this lawsuit.
Apr. 30: Bowes is party to a patent infringement lawsuit of $ 230,000. Bowes's attorney is certain it is remote that Bowes will lose this lawsuit.
Answers
Answered by
GPT-4o mini
Here are the journal entries for the transaction described:
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|-------------|-------------|
| Apr. 30 | No entry required | | |
Since the attorney believes it is remote that Bowes will lose the lawsuit, no journal entry is required.
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|-------------|-------------|
| Apr. 30 | No entry required | | |
Since the attorney believes it is remote that Bowes will lose the lawsuit, no journal entry is required.
Answer
estimated warranty expense at 2% of sales of $ 390,000.
journalize
journalize
Answered by
GPT-4o mini
To record the estimated warranty expense, which is 2% of sales totaling $390,000, you would calculate the warranty expense as follows:
Estimated Warranty Expense = Sales × Warranty Rate
Estimated Warranty Expense = $390,000 × 2% = $7,800
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|------------------------------|------------|-------------|
| [Date] | Warranty Expense | $7,800 | |
| | Estimated Warranty Liability | | $7,800 |
Replace "[Date]" with the actual date of the journal entry.
Estimated Warranty Expense = Sales × Warranty Rate
Estimated Warranty Expense = $390,000 × 2% = $7,800
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|------------------------------|------------|-------------|
| [Date] | Warranty Expense | $7,800 | |
| | Estimated Warranty Liability | | $7,800 |
Replace "[Date]" with the actual date of the journal entry.
Answer
Sep. 30: Bowes is party to a lawsuit for copyright violation of $ 110,000. Bowes's attorney advises that it is probable Bowes will lose this lawsuit. The attorney estimates the loss at $ 110,000.
journalize
journalize
Answered by
GPT-4o mini
Since Bowes' attorney advises that it is probable that Bowes will lose the lawsuit and estimates the loss to be $110,000, a journal entry is required to record the estimated loss.
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|------------|-------------|
| Sep. 30 | Lawsuit Loss Expense | $110,000 | |
| | Litigation Liability | | $110,000 |
This entry reflects the recognition of the liability for the estimated loss from the lawsuit.
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|------------|-------------|
| Sep. 30 | Lawsuit Loss Expense | $110,000 | |
| | Litigation Liability | | $110,000 |
This entry reflects the recognition of the liability for the estimated loss from the lawsuit.
Answer
Dec. 31: Bowes estimated warranty expense on sales for the second half of the year of $ 540, 000 at 2%.
journalize
journalize
Answered by
GPT-4o mini
To record the estimated warranty expense for the second half of the year based on sales of $540,000 at a warranty rate of 2%, you would first calculate the warranty expense:
Estimated Warranty Expense = Sales × Warranty Rate
Estimated Warranty Expense = $540,000 × 2% = $10,800
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|------------|-------------|
| Dec. 31 | Warranty Expense | $10,800 | |
| | Estimated Warranty Liability | | $10,800 |
This entry reflects the recognition of the estimated warranty expense related to sales in the second half of the year.
Estimated Warranty Expense = Sales × Warranty Rate
Estimated Warranty Expense = $540,000 × 2% = $10,800
Here is the journal entry:
| Date | Accounts | Debit | Credit |
|------------|-------------------------------|------------|-------------|
| Dec. 31 | Warranty Expense | $10,800 | |
| | Estimated Warranty Liability | | $10,800 |
This entry reflects the recognition of the estimated warranty expense related to sales in the second half of the year.
Answer
What is the balance in Estimated Warranty Payable assuming a beginning balance of $0?
Use the T-account to determine the ending balance for the Estimated Warranty Payable account. Use a "Bal." posting reference to show the ending balance of the account.
Use the T-account to determine the ending balance for the Estimated Warranty Payable account. Use a "Bal." posting reference to show the ending balance of the account.
Answered by
GPT-4o mini
To determine the balance in the Estimated Warranty Payable account using a T-account, we will account for the warranty expense recorded throughout the year. Based on your previous entries, we had two warranty expenses recorded:
1. **For sales of $390,000:**
- Estimated Warranty Expense: $7,800
- Estimated Warranty Payable increase: $7,800
2. **For sales of $540,000:**
- Estimated Warranty Expense: $10,800
- Estimated Warranty Payable increase: $10,800
Now we can summarize this in a T-account.
### T-account for Estimated Warranty Payable
```plaintext
Estimated Warranty Payable
------------------------------------------------
| Date | Debit | Credit |
------------------------------------------------
| | | $7,800 (from |
| | | Dec. 31 entry) |
| | | $10,800 (from |
| | | Sep. 30 entry) |
------------------------------------------------
| | | |
| | | Bal. $18,600 |
------------------------------------------------
```
### Balance Calculation:
- Total Credits (Warranty Expense recognized):
- $7,800 + $10,800 = $18,600
Since there are no debits to this account (i.e., no warranty claims have been made yet), the ending balance for Estimated Warranty Payable is **$18,600**.
So, the ending balance in the Estimated Warranty Payable account is **$18,600** with a Bal. entry below.
1. **For sales of $390,000:**
- Estimated Warranty Expense: $7,800
- Estimated Warranty Payable increase: $7,800
2. **For sales of $540,000:**
- Estimated Warranty Expense: $10,800
- Estimated Warranty Payable increase: $10,800
Now we can summarize this in a T-account.
### T-account for Estimated Warranty Payable
```plaintext
Estimated Warranty Payable
------------------------------------------------
| Date | Debit | Credit |
------------------------------------------------
| | | $7,800 (from |
| | | Dec. 31 entry) |
| | | $10,800 (from |
| | | Sep. 30 entry) |
------------------------------------------------
| | | |
| | | Bal. $18,600 |
------------------------------------------------
```
### Balance Calculation:
- Total Credits (Warranty Expense recognized):
- $7,800 + $10,800 = $18,600
Since there are no debits to this account (i.e., no warranty claims have been made yet), the ending balance for Estimated Warranty Payable is **$18,600**.
So, the ending balance in the Estimated Warranty Payable account is **$18,600** with a Bal. entry below.