Dell Computers is a leader in the industry with over $56 billion in sales each y

Question

Dell Computers is a leader in the industry with over $56 billion in sales each year. A recent annual report for Dell contained the following note:

Walt Disney is a well-recognized brand in the entertainment industry with products ranging from broadcast media to parks and resorts. The following note is from a recent annual report:

Brunswick Corporation is a multinational company that manufactures and sells marine and recreational products. A recent annual report for Brunswick contained the following information:

Halliburton is a major corporation involved in the entire life cycle of oil and gas reserves, starting with exploration and development, moving through production, operations, maintenance, conversion, and refining to infrastructure and abandonment. A recent annual report for the company stated the following:

Warranty We record warranty liabilities at the time of sale for the estimated costs that may be incurred under its limited warranty. Factors that affect our warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy our warranty obligation. 1. Assume that estimated warranty costs for 2014 were $500 million and that the warranty work was performed during 2015. Describe the financial statement effects for each year.

Explanation / Answer

Ans 1 The financial statemnt effect each year When warranty cost is estimated the entry is In 2014 Dr Cr Warranty Expense Dr $500 million Warranty Liability Cr $500 million So the expense will increase in the income statement and the liability will incraese in Balance Sheet When in 2015 warranty work is performed Warranty Liability Dr By the amount involved Cash Cr So both assets and liabilities will decrease of the balance sheet Ans 2 walMart disney In 2014 Dr Cr Cash $90 million Deferred Revenue $90 million So bothe current asset and liability will increase of the balance sheet For 2015 Deferred Revenue 54 Revenue 54 Revenue is recognized so Income will increase in Income statement and liability will be decreased in Balance Sheet dear user please don’t post multiple question in 1 question. I have answered first two

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