contingencies—warranties and lawsuits—at Maytag Corporation‚ a leading manufacturer of home and commercial appliances. Under the accrual accounting method‚ estimated warranty costs are charged to operating expenses in the year of sales‚ and a corresponding liability is established. This liability is reduced when the actual warranty charges are incurred. The notes on the financial statements reveal that in 2004 Maytag estimated $132‚841 in warranty liability and made $121‚162 in warranty payments. Therefore
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accrue the warranty expense adjustments proposed by West & Fair. Throughout the previous year Proli has been determining their warranties payable according to 0.2% of their annual net sales. Upon further investigation by our audit staff member‚ it was determined that since 2004‚ Proli Footwear’s warranties payable have been 0.3% of their annual net sales. Also $102‚000 worth of warranty liabilities was debited to other assets erroneously. Due to the miscalculation or the warranty liability percentage
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Non-Linear Pro has misrepresented the quality of the product‚ Quick Takes Video can bring a lawsuit to Non-Linear Pro for breach of warranty and attempt to recover damages. Lease Agreement and Provision of Uniform Commercial Codes Non-Linear Pro as lessor made statements of fact about its product performance‚ its operations or features‚ and provided express warranty
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Effects of a Breach of Contract There are various types of contract with in the world of law such as civil law which deals with relations between individual citizens where as private law focuses on the relations between ordinary people on a day to day basis‚ both types of law include the law of contract. A contract is an agreement that is legally enforceable and therefore can be settled within a court of law‚ however how can we distinguish between a contract and any other form of non-legally enforced
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Sale of Goods Act‚ 1930: It is an Act to define and amend the law relating to the sale of goods. It tells about the meaning of sale and goods‚ warranties and conditions‚ property transfer and includes the rights of unpaid seller. The contracts for the sales of goods are subject to legal principles similar to the all other contracts .This law is included in chapter VII of the Indian Contract Law‚ 1872[sections 2(5) and 3]. It first came into force from 1st July 1930. It has been re-enacted again
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because of it. Sandra can therefore‚ bring a breach of express warranty‚ An Implied warranty of merchantability of goods is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. In order for the goods to be merchantable they must be fit for the ordinary purposes of which such goods are used. The implied warranty of merchantability applies to a seller of used goods as well but the warranty is not as expansive because it is used. Here Dean is a merchant
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AB1102: Accounting 2 Notes Objective of Financial Statements – objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors‚ lenders and other creditors in making decisions about providing resources to the entity. 2 roles of financial reporting: Contracting (backward looking) and Valuation (forward looking) Qualitative Characteristics (QC) of Useful Financial Information - Relevance o Predictive
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Proposition: Offer to extend the original Warranty at internal cost from 10 to 20 years Financial Implication: Contractually prepay the warranty at the rate of 18% of the purchase price per inverter Perform Warranty services‚ submit monthly invoices and “true up” at year end Summary Total Project revenue $ 18‚000‚000.00 Warranty Premium 3‚240‚000.00 Maintenance contract income Total revenue $ 21‚240‚000.00 Total cost of sales 10‚800‚000.00 Warranty expense 3‚240‚000.00 Gross expense
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Index Frame Bird: A Confusion between Property Rules and Liability Rules [2] [1]‚ John P. Palmer "It just doesn’t matter." Bill Murray in the movie‚ Meatballs In Bird [Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. Ltd.] [3] ‚ the members of the Supreme Court of Canada made three points quite clear. First‚ they do not understand the distinction between property rules and liability rules. Second‚ they do not understand how incentive effects operate in the economy. Third‚ they
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Abstract This paper is an analysis of Road King Trucks’ new project which is introducing a new product into its product line. I will decide whether run the project or not. Six issues will be discussed as follows 1) importance of energy cost; 2) project’s cash flows; 3) cost of capital; 4) choose an engine 5) evaluation 6) accept or reject. We should accept the project because of the positive NPV and high IRR. We will gain $532 million in wealth which is a big money on the scale like this. The
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