1) In the most recent year of operations, Bradley’s Video Games sold merchandise costing $25,000 for $ 75,000. All merchandise was sold under a one-year warranty. At the time of sale, Bradley estimated that warranty claims would amount to 3% of sales. During the year, Bradley replaced defective merchandise for $1,290. All transactions were cash transactions.
a. Prepare journal entries to record all transactions related to the warranty.
Please see the attached document for the chart.
b. Based solely on the above information, determine Bradley’s operating income for the year.
2) All Sports Company publishes a monthly magazine. Subscriptions to the magazine cost $20 per year. During November 2012, All Sports sells 15,000 subscriptions beginning with the December issue.
Required:
a. Prepare the entry in November to record the receipt of the subscriptions.
b. Prepare the adjusting entry at December 31, 2012.
Please see the attached document for the chart.
3) French’s Fine Foods experienced the following transactions during the year:
a) A customer fell in one of French’s stores and is seeking $150,000 in damages. French’s attorneys believe that it is remote that the customer will win the lawsuit.
b) Another customer became seriously ill after eating some bad snails purchased from French’s. The customer is seeking $200,000 in damages. French’s attorneys believe that it is probable that the customer will win the lawsuit and receive the $200,000.
c) A competitor is suing French’s for a trademark violation and is seeking $1,500,000 in damages. French’s attorneys believe that it is reasonably possible that the competitor may win the lawsuit.
Required: For each of the situations, determine the accounting treatment required. If a journal entry is needed prepare the journal entry.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more