How long is iphone 6s warranty

Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are discovered in one year from the date of retail purchase, Apple will repair or replace the iPhone at no cost to the customer. Recently, a batch of iPhone 6s devices was discovered to have a defect that causes them to shut down unexpectedly when the battery charge level reaches about 30%. Apple has issued a battery replacement program for these iPhone 6s devices.

Questions

1. Assume that Apple makes a quarterly adjusting entry using the percent-of-sales method to estimate warranty expense for all new iPhones sold during the quarter. How will this adjusting entry impact Apple’s balance sheet? Its income statement?

2. Is the adjusting entry for warranty expense an accrual or a deferral? Explain.

3. Now think about the battery replacement program for the affected iPhone 6s devices. When a customer brings in his/her iPhone 6s for a battery replacement under the battery replacement program, how will this transaction impact Apple’s balance sheet? Its income statement?

business accounting
0 0
Add a comment
Next >< Previous
Sort answers by oldest
Homework Answers
Answer #1
Answer-1:

Warranty expense is accrued with a debit to the warranty expense account and a credit to the warranty liability account.

As and when sale is recorded, the income statement is impacted by the full amount of warranty expense, even if there are no warranty claims in that period. Balance sheet is also impacted with the same amount on its liability side.

Answer-2:

The adjusting entry for warranty expense is an accrual.

When a company provides a warranty with its product, the company has an obligation to repair or replace the product if it is defective. That obligation generates a liability at the time the product is sold because the company has a liability that starts when the product is sold.

Hence, the company can not defer this liability to a later period.

Answer-3:

As actual warranty claims are received, debit the warranty liability account and credit the inventory account for the cost of the replacement parts and products sent to customers.

As claims appear in later accounting periods, the only subsequent impact is on the balance sheet, as the warranty liability and inventory accounts are both reduced. Income statement is not impacted with this.

0 0
Add a comment
Know the answer?
Add Answer to:
Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are...
Your Answer:
Post as a guest
Your Name:
What's your name?

What's your source?
What's your source?
Earn Coin
Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Post Your Answer
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
Required: 1. What is the amount of Apple’s accounts receivable as of September 30, 2017? 2....
Required: 1. What is the amount of Apple’s accounts receivable as of September 30, 2017? 2. Compute Apple’s accounts receivable turnover as of September 30, 2017. 3. How long does it take, on average, for the company to collect receivables for fiscal year ended September 30, 2017? 4. Apple’s most liquid assets include (a) cash and cash equivalents, (b) short-term marketable securities, (c) accounts receivable, and (d) inventory. Compute the percentage that these liquid assets (in total) make up of...

ADVERTISEMENT

Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
Share Your Knowledge
Post an Article

Post an Answer

Post a Question with Answer

Earn Money
Contribute Homework Answers
($1+ Per Post)

ADVERTISEMENT
Recent Questions
Recent Answers
Solve it for me please dese t o m 5- 18 V If the magnitude of...
asked 48 minutes ago
PRE-LAB QUESTIONS 1. Calculate the enthalpy change for the reaction P,o,(s) + 202(g)--PO10(g) Given the following...
asked 1 hour ago
1. (10 pts.) Run the Bellman-Ford algorithm on the following graph with source vertex being x....
asked 1 hour ago
roblem #1 ravelocity would like to estimate the current average domestic airfare. The data contained in...
asked 1 hour ago
Instruction: Prepare the correct adjusting entry for the year ended December 31, 2021. Write your answer in the journal sheet.
asked 1 hour ago
Instruction: Prepare the correct adjusting entry for the year ended December 31, 2021. Write your answer in the journal sheet or a yellow paper. Take a photo or scan your answer and upload to google form/Microsoft form. The Insurance Expense account ha
asked 1 hour ago
Is E(X/Y)=E(X)/E(Y) true for all independent random variables X and Y provided Y ≠ 0 and...
asked 2 hours ago
Students often equate the structural frame with red tape and bureaucracy and see the human resource...
asked 2 hours ago
A 100-watt motor (60% efficient) is available to raise a load 5 meters into the air....
asked 2 hours ago
Approximately what percentage of the Canadian M1 money supply does currency in circulation (paper money plus...
asked 3 hours ago
ADVERTISEMENT
Back to top
About
Contact
Terms of Use
Privacy Policy
Academic Honesty Policy
Paper Writing Service
Free Writing Tool
Homework Answer Scanner App
© 2013-2021 HomeworkLib.com

user contributions licensed under cc by-sa 4.0

I1.99ML0LD21.1KI439KRank11.4Kln/awhoissourceRank22.7KAdv Disp Ads0More dataSummary reportDiagnosisDensity369n/a
0
SHARES