Wright Machinery Corporation manufactures automobile engines for major automobile producers. The engines sell for $910 per engine. In addition, customers have the option to purchase a service-type warranty for $70 per engine that protects against any defects for a period of 5 years. During 2019, Wright sold 9,000 engines to National Motors. National Motors purchased warranties on all of the engines purchased. During 2019, Wright repaired defective motors at a cost of $93,400.
Prepare the necessary journal entries to record:__________.1. The sale of engines and service warranty on account during 2016 (one entry).2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.

Answer:

1. The sale of engines and service warranty on account during 2016 (one entry).

Dr Cash 8,820,000

    Cr Sales revenue 8,190,000 (= 9,000 x $910)

    Cr Unearned warranty revenue 630,000 (= 9,000 x $70)

2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.

to record warranty expenses during the year

Dr Warranty expense 93,400

    Cr Cash 93,400

to record warranty revenue

Dr Unearned warranty revenue 126,000 (= $630,000 / 5 = $126,000)

    Cr Extended warranty revenue 126,000

Explanation:

Service-type warranties sold are a liability for the company (unearned revenue) and they will be accrued as time goes on. In this case, accrued warranty revenue is adjusted annually but it could also be adjusted monthly.

Groups of 18th century skilled artisans formed secret societies for two basic reasons. Which of the following is one of those reasons?
1. to equalize their relationship with their employers
2. to distinguish themselves from carpenters and shoemakers
3. to gain control of the German government
4. to avoid having to set minimal standards for their crafts

g Dybala Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 110 100 % Variable expenses 66 60 % Contribution margin 44 40 % The company is currently selling 5,120 units per month. Fixed expenses are $210,000 per month. The marketing manager believes that a $6,600 increase in the monthly advertising budget would result in a 230 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change

Genzyme, the maker of Cerdelga, a drug that treats a genetic illness called Gaucher's disease that affects 10,000 people worldwide, has been criticized for charging up to $300,000 for a year's worth of Cerdelga. This is an example of the manufacturer adhering to its

Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a highspeed modem priced at $330 per unit, the average weekly demand at each distribution center is 70 units. Average shipment size to each distribution center is 350 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipatory inventory.a. On average, how many dollars of pipeline inventory will be in transit to each distribution center?b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centers?

The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:
Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $27,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:
Annual cost of servicing, taxes, and licensing $ 4,300
Repairs, first year $ 2,200
Repairs, second year $ 4,700
Repairs, third year $ 6,700
At the end of three years, the fleet could be sold for one-half of the original purchase price.
Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $70,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract.
Riteway Ad Agency’s required rate of return is 20%.
Required:
1. Use the total-cost approach to determine the present value of the cash flows associated with each alternative. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and transferred out 44,000 44,000 Units in Ending Work in Process: Direct Materials (9,000 * 100%) 9,000 Conversion (9,000 * 70%) 6,300 Equivalent Units of Production 53,000 50,300 Cost per Equivalent Unit Costs of beginning work in process $43,400 $63,700 Costs incurred this period 145,100 195,100 Total costs $188,500 $258,800 Cost per equivalent unit $3.56 per EUP $5.15 per EUP The total conversion costs transferred out of the Canning Department equals:_______.a. $156,640. b. $179,068. c. $188,500.

Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $156,000 of services on account. In 2021, the company wrote off uncollectible accounts of $6,300. By the end of 2021, cash collections on accounts receivable totaled $132,300. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible.
Required:
1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the write-offs of allowance for uncollectible accounts during 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
1
record to recognize bad debt expense for 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
2

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:
Product A Product B
Initial investment:
Cost of equipment
(zero salvage value) $290,000 $490,000
Annual revenues and costs:
Sales revenues $340,000 $440,000
Variable expenses $154,000 $206,000
Depreciation expense $58,000 $98,000
Fixed out-of-pocket
operating costs $79,000 $59,000
The company's discount rate is 16%.
Required:
1. Calculate the payback period for each product.
2. Calculate the net present value for each product.
3. Calculate the internal rate of return for each product.
4. Calculate the project profitability index for each product.
5. Calculate the simple rate of return for each product.
6A. For each measure, identify whether Product A or Product B is preferred.
6B. Based on the simple rate of return, Lou Barlow would likely:
1. Accept Product A
2. Accept Product B
3. Reject both products