Problemnewton company introduced a line of laptop computers, Ask an Expert

Accounting

Problem

Newton Company introduced a line of laptop computers in 2016 that carry a 1-year assurance-type warranty. Based on experience with other computers that it sells, Newton estimated warranty costs as 3% of net sales. Net sales of the laptop in 2016 were $5,000,0000, and Newton recorded warranty expense of $150,000. In 2017, based on the previous years' warranty costs, Newton revises its estimate of warranty costs to 1% of net sales. In 2017, Newton reported $8,000,000 in net sales of the laptop.

Required:

1. Prepare any entry needed in 2017 to account for this change.
2. Next Level Discuss the advantages and disadvantages of accounting for a change in this manner.

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92767202

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - the asset account office supplies had a

Question - The asset account, office supplies had a beginning balance of 5700. During the accounting period, office supplies were purchased, on account for 5100. A physical count, on the last day of the accounting period ...

Question - ethics classification of income statement

Question - ETHICS (Classification of Income Statement Items) As audit partner for Grupo and Rijo, you are in charge of reviewing the classification of unusual items that have occurred during the current year. The followi ...

Assignment - fraud prevention and detection planyou went

Assignment - Fraud Prevention and Detection Plan You went back to your corporate controllership position with Dingwow Inc. Senior Management has assigned you as the team lead to develop a fraud prevention and detection p ...

Question - daniels adjusted gross income is 90000 during

Question - Daniel's adjusted gross income is $90,000. During the year he incurred $18,000 of medical expenses and was reimbursed for $3,000 of these expenses. What is his allowable medical expense deduction if he is age ...

Question - the will of the decedent established a trust for

Question - The will of the decedent established a trust for the benefit of his wife and two sons. The trust states that the trustee shall pay to the widow $25,000 a year and $12,500 a year to each of his two sons. There ...

Question each part should be supported with extensive text

Question: Each part should be supported with extensive text explaining and supporting the details of your plan. Part Two - List of financial goals (short, medium, and long-term) ? ?You should have a minimum of 3 for each ...

Question - on january 1 grissom inc issued 10-year 4 bonds

Question - On January 1, Grissom Inc. issued 10-year, 4% bonds payable with a par value of $500,000, and received $490,000 in cash proceeds. The market rate of interest at the date of issuance was 4.5%. The bonds pay int ...

Question - lopez company purchased goods with the following

Question - Lopez Company purchased goods with the following terms and details: Sales price, $5,000 Terms, 1/10, n/30 Date of sale, March 8 Date of payment, March 19 Returns and allowances (before payment), $200 Shipping, ...

Question -what are the factors that affect the decision to

Question - What are the factors that affect the decision to prosecute an entity? How can computers and technology help in investigating a fraud? What kinds of challenges can the involvement of technology present to a cas ...

Question - the following are reported amounts from ellis

Question - The following are reported amounts from Ellis Company's multiple-step income statement: Cost of merchandise sold $199,840 Merchandise inventory 139,890 Sales 307,750 Sales discounts 5,850 Sales returns 11,690 ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert