The Captain Company Began Operations on January 1, 2016

question 44

Essay

The Captain Company began operations on January 1, 2016. In 2016, Captain's sales were $400,000, and payments arising out of warranty obligations were $18,000.
Required:
a. Assume that this is an assurance-type warranty and $0.10 of warranty cost will be incurred for each $1.00 of sales. Prepare the 2016 journal entryies) for warranty expense and payments using the modified cash basis.
b. Assume that this is an assurance-type warranty and $0.10 of warranty cost will be incurred for each $1.00 of sales. Prepare the 2016 journal entryies) for warranty expense and payments using the GAAP approach which requires that warranty expense and the related liability) be accrued in the period of the sale.
c. Assume that this is a service-type warranty and $0.10 of each $1.00 of sales represents warranty revenue. Prepare the 2016 journal entries related to product sales and warranty activities..

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Definitions:

Middle Adulthood

A stage of life, typically considered to be from ages 40 to 65, marked by stability, maturity, and established social and economic roles.

Reproductive Ability

The capacity of an individual or organism to produce offspring.

Men

Adult human males, often referred to in contexts involving gender differences, social roles, or physiological characteristics.

Women

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