- This topic has 3 replies, 2 voices, and was last updated 5 years ago by
.
- Posts
Hi Guys,
Can someone please help me understand where they get some of the solution:
in the Statement of profit or loss:
Where do they get the 15 for warranty?in the Statement of financial position:
Where do they get the 3 for accrued interest which is added to the payables?Thanks
Rabia1. The warranty provision account had a balance of $90,000 before making the annual adjustments. At the year end, it was estimated that warranty provision should be $75,000. Therefore, to bring the account balance to $75,000 we will need to reduce the account balance by $75,000. The entry will be:
Dr Warranty Provision $15,000
Cr SOPL $15,0002. The 10% annual interest payable on the loan notes is $8,000. So far, $5,000 have already been paid, meaning that an additional $3,000 are accrued.
Hope this helps.
- The topic ‘Kaplan Textbook – Need Help Chapter 1 Example – Picklette’ is closed to new replies.