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Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159 Exercise 30
Accrued product warranty
General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows:
Presume that GM's sales were $135,592 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million.
a. Why are short- and long-term estimated warranty liabilities disclosed separately
b. Provide the journal entry for the Year 2 product warranty expense.
c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements
General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows:
Presume that GM's sales were $135,592 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000 million.
a. Why are short- and long-term estimated warranty liabilities disclosed separately
b. Provide the journal entry for the Year 2 product warranty expense.
c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements
Explanation
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(a) Importance of disclosure of short lo...
Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
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