Roberts Company Is Preparing Monthly Adjusting Entries at December 31

question 20

Essay

Roberts Company is preparing monthly adjusting entries at December 31. An analysis reveals the following:
1. During December, Roberts Company sold 3,000 units of a product that carries a 60-day warranty. The sales for this product totaled $100,000. The company expects 4% of the units to need repair under the warranty and it estimates that the average repair cost per unit will be $25.
2. The company has been sued by a disgruntled employee. Legal counsel believes that it is possible that the company will have to pay $200,000 in damages.
3. The company has been named as one of several defendants in a $400,000 damage suit. Legal counsel believes it is unlikely that the company will have to pay any damages.
4. Employees earn vacation pay at a rate of 1 day per month. During December, ten employees qualify for vacation pay. Their average daily wage is $80 per employee.
Instructions
Prepare adjusting entries, if required, for each of the four items.

---

Definitions:

Totals Row

A row at the end of a table or spreadsheet that provides summation, average, count, or other aggregate functions of the data in each column.

Calculated Field

A field in databases or spreadsheets that performs a calculation using values from other fields.

Make-Table Query

A type of query in database applications used to create a new table from the results of a select query.

Parameter Query

A type of database query that requires the user to provide one or more criteria values upon which the search is based, making the query flexible and interactive.