Question

Buffalo Company sold 218 color laser copiers on July 10, 2020, for $3,680 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $341. Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2020. Actual warranty costs (inventory) incurred in 2020 were $17,060

Answer 1

ANSWER

General Journal

S.no.	Account title and explanation	Debit	Credit
(a)	Cash (218 x 3,680 )	$802,240
	Sales		$802,240
	(To record sales of copiers)
(b)	Warranty expense	$17,060
	Inventory		$17,060
	(To record actual warranty expense incurred)
(c)	Warranty expense ($341x 218) - $17,060	$57,278
	Estimated Warranty liability		$57,278
	(To record adjustment for estimated Warranty liability)

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