Question

Exercise 13-11 (Part Level Submission) Early in 2020, Carla Equipment Company sold 600 Rollomatics at $5,500 each. During 2020, Carla spent $19,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Your answer is partially correct. Try again. Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be $32,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit At SaleDuring 2020Dec. 31, 2020 At SaleDuring 2020Dec. 31, 2020 At SaleDuring 2020Dec. 31, 2020 (b) The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

Answer:

Part-(a):

Date	Account title and explanation	Debit	Credit
During 2020	Cash [600 x $5,500]	$3,300,000
	Sales revenue		$3,300,000
	[To record the sale of Rollomatics]
During 2020	Warranty Expense	$19,000
	Cash		$19,000
	[To record warranty costs incurred]
During 2020	Warranty Expense	$13,000
	Estimated Liability under Warranties [32,000-19,000]		$13,000
	[To record accrued estimated warranty costs]