McBride Industries completed the following transactions during 2016
Oct. 1 Made sales of $10,000. McBride estimates that warranty expense is 5% of sales. (Record only the warranty expense.)
Oct. 24 Paid $250 to satisfy warranty claims.
Dec. 31 Estimated vacation benefits expense to be $2,350.
Dec. 31 McBride expected to pay its employees a 4% bonus on net income after deducting the bonus. Net income for the year is $25,000.
Journalize the transactions (explanations are not required). Round to the nearest dollar.
What will be an ideal response
Date Accounts and Explanation Debit Credit
2016
Oct. 1 Warranty Expense (5% x $10,000 ) 500
Estimated Warranty Payable 500
Oct. 24 Estimated Warranty Payable 250
Cash 250
Dec. 31 Vacation Benefits Expense 2,350
Vacation Benefits Payable 2,350
Dec. 31 Employee Bonus Expense (4% x 25,000 ) / 1.04 962
Employee Bonus Payable 962
You might also like to view...
Many advertising researchers believe that emotional reaction tests to ads are more accurate than physiological arousal tests because emotional reactions cannot be easily faked
Indicate whether the statement is true or false
Which of the following is not an element of corporate imagination?
a. Overturn price–performance assumptions b. Escape the tyranny of the served market c. Use new sources of ideas for innovative product concepts d. Get out in front of customers e. Identify a network of "Angels"
The delivery terms "ex-ship" and "no arrival, no sale" indicate that the contract is a shipment contract
a. True b. False Indicate whether the statement is true or false
In 2015, a company had a total debt of $7 million. In 2016, the debt increased to $9 million. The change in earnings per share (EPS) of the company will be a direct result of change in its:
A. gross domestic product. B. beta coefficient. C. coefficient of variation. D. capital structure E. standard deviation.