— TEE E13-1 (Statement of Financial Position Classification) How would each of the following items be re- ported on the statement of financial position? (a) (b) © @ {e) ita} ® (h) @ Accrued vacation pay. Income taxes payable. Service warranties on appliance sales. Social Security taxes payable. Personal injury claim pending. Unpaid bonus to officers. Deposit received from customer to guarantee performance of a contract. Sales taxes payable. Gift certificates sold to customers but not yet redeemed. (j) Premium offers outstanding. (k) Accounts payable. (@) Employee payroll deductions unremitted. (m) Current maturities of long-term debts to be paid from current assets. (n) Cash dividends declared but unpaid. (0) Dividends in arrears on preference shares. (p) Loans from officers.4 E13-11 (Warranties) Winslow Company sold 150 color laser copiers in 2010 for £4,000 apiece, together with a one-year warranty. Maintenance on each copier during the warranty period averages £300. Instructions (a) Prepare entries to record the sale of the copiers and the related warranty costs, assuming that the accrual method is used. Actual warranty costs incurred in 2010 were £17,000. (b) On the basis of the data above, prepare the appropriate entries, assuming that the cash-basis method is used.Exercises (4) E13-12 (Warranties) Selzer §, During 2010, Selzer applicable trans: quipment Company sold 500 Rollomatics during 2010 at $6,000 each. "T spent $30,000 servicing the 2-year warranties that accompany the Rollomatic. All ‘actions are on a cash basis. Instructions (a) Prepare 2010 entries for Selzer using the expense warranty approach. Assume that Selzer estimates the total cost of servicing the warranties will be $120,000 for 2 years. (b) Prepare 2010 entries for Selzer assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $160,000 relates to sales of warranty contracts. Selzer estimates the total cost of servicing the warranties will be $120,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs.4] E13-15 (Restructuring) On December 31, 2010, the board of Dolman Group decided to close one of its divisions. On December 31, 2010, a detailed plan for closing the division was agreed to by the board, and letters were sent to customers and employees affected by this closure. Instructions (a) What is a restructuring? Provide two examples. (b) To ensure that the restructuring is valid, what two conditions must take place? (c) Possible costs that may be incurred during the restructuring are as follows: (1) investment in new software as a result of closing the division, (2) cost of moving some assets of the closed division to other parts of the company, (3) employee termination costs related to closing the division, (4) ex- pected future operation losses in closing the division, and (5) onerous contract provisions related to the closing. Indicate which (if any) of these costs may be part of a restructuring provision.-- as: au4i, appiyuly tne expense warranty accrual metnoa. @ P13-6 (Extended Warranties) Dos also offers to each Passos Company sells televisions at an average price of $900 and form periodic se: customer a separate 3-year warranty contract for $90 that requires the company to per- rvices and to replace defective parts. During 2010, the company sold 300 televisions and 270 warranty contracts for cash. It estimates the 3-year warranty costs as $20 for parts and $40 for labor and accounts for warranties separately. Assume sales occurred on December 31, 2010, income is recog- nized on the warranties, and straight-line recognition of warranty revenues occurs. Instructions (a) Record any necessary journal entries in 2010. (b) What liability relative to these transactions would appear on the December 31, 2010, statement of financial position and how would it be classified? In 2011, Dos Passos Company incurred actual costs relative to 2010 television warranty sales of $2,000 for parts and $4,000 for labor. Reco: journal entries in 2011 relative to 2010 television warranties. a wis aie ao iste’ the 2010 television warranties would appear on the December 31, 2011, statem 7 of financial position and how would they be classified? be PALS Abana meant ok me an