Homework Answers
| Requirement -2 | Account titles and explanation | Debit | Credit | ||||||||||
| 1 | Cash | $444,000 | |||||||||||
| deferred revenue - extended warranties | $444,000 | ||||||||||||
| (cash received for extended warranties) | |||||||||||||
| 2 | Deferred revenue - extended warranties | $222,000 | (440,000/2) | ||||||||||
| Revenue - extended warranties | $222,000 | ||||||||||||
| (warranties income booked for year 1 based on straight line method) | |||||||||||||
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I have figured that the A/R journal entry should be cash. But I
cannot find out the values for the two journal entries for No. 2. I
have attempted $444,000/2= $222,000.00 but that answer is
incorrect.
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I have figured that the A/R journal entry should be cash. But I
cannot find out the values for the two journal entries for No. 2. I
have attempted $444,000/2= $222,000.00 but that answer is
incorrect.
Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase, customers are offered the opportunity to also buy a two-year extended warranty for an additional charge. During the year, Carnes received $444,000 for these extended warranties (approximately evenly...
Cupola Awning Corporation Introduced a new line of commercial awnings In 2018 that carry a two-year warranty agalnst 2% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Actual Warranty Expenditures $49,500 ales $5,340, 000 Required: 1. Does thls sltuation represent a loss contingency? 2 Prepare Journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2018. 3. What amount...
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