Answer to Question #99239 in Accounting for Mercy

Question

a.Prepare the journal entry to record the acquisition of the equipment on January 1, 2005.
b. Prepare the journal entry to record the depreciation expense for the year 2005 using the units of production method.
c. Show, in goodform, how the equipment will be presented on the balance sheep at December 31,2005.
d. Assume Mira used the straight line method of depreciation instead of the units of preoduction method of depreciation.what will bethe effect of this change on net income?
e. Mira provides a warranty on the coffee makers. Based on its experience, Mira expects to incur a warranty cost of 2% of the selling price. The coffee makers were sold at a price of $20 per unit.
Prepare the year to end adjusting journal entry to record the estimated warranty liability.

Answer 1

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