https://besttutors.net/wp-content/uploads/2020/05/logo-best-tutors-300x60.png 0 0 Paul https://besttutors.net/wp-content/uploads/2020/05/logo-best-tutors-300x60.png Paul2022-05-23 00:10:112022-05-23 00:10:11The following selected transactions relate
- Classical’s products carry a one-year warranty against manufacturer’s defects. Based on previous experience, warranty costs are expected to approximate 4% of sales. Sales were $2 million (all credit) for 2018. Actual warranty expenditures were $30,800 and were recorded as warranty expense when incurred.
- Although no customer accounts have been shown to be uncollectible, Classical estimates that 2% of credit sales will eventually prove uncollectible.
- In December 2018, the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws. On January 23, 2019, Classical reached a settlement with state authorities to pay $1.5 million in penalties.
- Classical is the plaintiff in a $4 million lawsuit filed against a supplier. The suit is in final appeal and attorneys advise that it is virtually certain that Classical will win the case and be awarded $2.5 million.
- In November 2018, Classical became aware of a design flaw in an industrial saw that poses a potential electrical hazard. A product recall appears unavoidable. Such an action would likely cost the company $500,000.
- Classical offered $25 cash rebates on a new model of jigsaw. Customers must mail in a proof-of-purchase seal from the package plus the cash register receipt to receive the rebate. Experience suggests that 60% of the rebates will be claimed. Ten thousand of the jigsaws were sold in 2018. Total rebates to customers in 2018 were $105,000 and were recorded as promotional expense when paid