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Module 7 Notes

Module 7 outlines the roll-forward table used to track the warranty account balance, detailing the calculations for changes during a specific period. It includes the formula for determining the ending warranty account balance based on additions and subtractions related to warranties issued, settlements, and recalls. Additionally, it provides a formula for calculating interest expense based on the borrowed amount and interest rate over a specified period.

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8 views1 page

Module 7 Notes

Module 7 outlines the roll-forward table used to track the warranty account balance, detailing the calculations for changes during a specific period. It includes the formula for determining the ending warranty account balance based on additions and subtractions related to warranties issued, settlements, and recalls. Additionally, it provides a formula for calculating interest expense based on the borrowed amount and interest rate over a specified period.

Uploaded by

Breezy2917
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Module 7

Roll-forward Table
Shows the balance at the beginning, then additions, subtractions,
changes, and then balance at the ending period

Calculating changes in Warranty account balance during specific period


Beginning Warranty account balance
+ Warranties issued during the period for products sold during the
period
– Settlements made during the period (amount company spent to fix
products)
+/- Recalls and changes to pre-existing warranty liabilities
= Ending Warranty account balance

Calculating interest expense


= Borrowed amount x interest rate x (no. of days borrowed / 365)

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