Variety of musical instruments-sound reproduction equipment

Assignment Help Financial Accounting

Reference no: EM131262329

Wildhorse Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Wildhorse uses two sales promotion techniques—warranties and premiums—to attract customers. Musical instruments and sound equipment are sold with a one-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $30 for an MP3 player. Wildhorse pays $41 for each player and estimates that 60% of the coupons given to customers will be redeemed. Wildhorse’s total sales for 2017 were $6,978,000—$5,878,000 from musical instruments and sound reproduction equipment and $1,100,000 from recorded music and sheet music. Replacement parts and labor for warranty work totaled $180,200 during 2017. A total of 5,900 players used in the premium program were purchased during the year and there were 1,294,000 coupons redeemed in 2017. The balances in the accounts related to warranties and premiums on January 1, 2017, were as shown below.

Inventory of Premiums $ 40,590

Premium Liability 44,400

Warranty Liability 123,600

Wildhorse Music Emporium is preparing its financial statements for the year ended December 31, 2017. Determine the amounts that will be shown on the 2017 financial statements for the following. (Round answers to 0 decimal places, e.g. 125.)

(a) Warranty Expense $

(b) Warranty Liability $

(d) Inventory of Premiums $

(e) Premium Liability $

Reference no: EM131262329

Questions Cloud

As part of its executive compensation plan : As part of its executive compensation plan, Vertovec Inc. granted 69,000 of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. Compute Vertovec’s basic and diluted earnings per share for the ..

Compute basic and diluted earnings per share : On December 31, 2015, Berclair Inc. had 600 million shares of common stock and 16 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. Compute Berclair’s basic and diluted earnings per share for the year ended Decem..

What are current assets-long term nvestments-net property : The following information is taken from the records of ROK Corporation at December 31, 2010: What are current assets, long term nvestments, Net property, plant, and equpment, intangible assets, current liabilities, long term liabilities, stockholders..

Manufactures sun protection lotion : ABC Company manufactures sun protection lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellent. The following data are for the current month: Direct materials are added at the beginning of the proc..

Variety of musical instruments-sound reproduction equipment : Wildhorse Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Wildhorse uses two sales promotion techniques—warranties and premiums—to attract customers. Musical instruments and..

Cost of ending work in process under weighted average method : Ralph Inc. manufactures a product that passes through two processes: Mixing and Packaging. All manufacturing costs are added uniformly in the Mixing Department (i.e., same completion percentage applied to direct materials and conversion costs). Dete..

What is the future worth of the bank account in year : A bank account earns 0.06% per year compounded bimonthly. An initial deposit of $80,000 is made with consecutive payments of $1,000 every 3 months for 10 years. Semiannual withdrawals of $3,000 are planned to occur beginning in years 3 to 10. What is..

Prepare the stockholders equity section of balance sheet : Pringle Corporation has been authorized to issue 21,000 shares of $100 par value, 7%, noncumulative preferred stock and 1,071,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. Prepare the stockholders’..

User Account

All Pages