QUIZZER

ACC 211
Grace Company reported the following liability account balance on
December 31, 2019:

Accounts Payable 2,000,000

Bonds Payable, due 2020 4,000,000
Discount on bonds payable 400,000
Deferred tax liability 500,000
Dividend payable due on 2/15/2021 1,000,000
Income tax payable 800,000
Note Payable due 1/15/2021 1,200,000

The deferred tax liability is based on a temporary difference stemming

from different depreciation method for financial reporting and income
tax purposes.

What total amount should be reported as current liabilities on December

31, 2019?
During 2019, Day Company sold 500,000 boxes of cake mix
under a new sales promotional program.

Each box contained one coupon, which entitled the customer

to a baking pan upon remittance of P40.

The entity paid P50 per pan and P5 fro handling and shipping.

The entity estimated that 80% of the coupons will be

redeemed, even though only 300,000 coupons had been
processed during 2019.

What amount should be reported as premium expense?

During 2019, Day Company sold 500,000 boxes of cake mix
under a new sales promotional program.

Each box contained one coupon, which entitled the customer to

a baking pan upon remittance of P40.

The entity paid P50 per pan and P5 fro handling and shipping.

The entity estimated that 80% of the coupons will be redeemed,

even though only 300,000 coupons had been processed during
2019.

What amount should be reported as premium liability for

unredeemed coupons on December 31, 2019?
A company sells an electric timer that carries a 90-day
unconditional warranty against product failure. Based on a
reliable statistical analysis, 2% of units sold will require an
average cost of P150 per unit.
Oct Nov Dec
Units sold32,00028,00040,000
Known product
failures from sales of:
October 160 320 160
November 80 280
December 180

How much is the estimated warranty liability at December 31?