Question

Carnes Electronics sells consumer electronics that carry a 90-day manufacturers warranty. At the time of purchase, customersAnswer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 How should it& Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Prepare jour

0 0
Add a comment Improve this question Transcribed image text
Answer #1
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)

*If you have any doubt related to this question please feel free to ask in the comment section. Please give your valuable feedback.

Add a comment
Know the answer?
Add Answer to:
Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Cames Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase,...

    Cames 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 $440,000 for these extended warranties (approximately evenly throughout the year) Required: 1-0. Does this situation represent a loss contingency? 1.b. How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended warranties and any aspects of the warranty...

  • Exercise 13-16 Extended warranties [LO13-5, 13-6] Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's...

    Exercise 13-16 Extended warranties [LO13-5, 13-6] 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 recejved $432,000 for these extended warranties (approximately evenly throughout the year). Required: 1-a. Does this situation represent a loss contingency? 1.b. How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended warranties...

  • Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase,...

    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 $412,000 for these extended warranties (approximately evenly throughout the year) Required 1-a. Does this situation represent a provision? Yes No 1-b. How should it be accounted for? Revenue is deferred as a liability sale, and recognized on straight-line basis at the time of...

  • Exercise 13-16 (Algo) Extended warranties (LO13-5, 13-6) Carnes Electronics sells consumer electronics that carry a 90-day...

    Exercise 13-16 (Algo) Extended warranties (LO13-5, 13-6) 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 $414,000 for these extended warranties (approximately evenly throughout the year) Required: 1-a. Does this situation represent a loss contingency? 1.b. How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended...

  • I have figured that the A/R journal entry should be cash. But I cannot find out...

    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...

  • Carnes Electronics sells consumer electronics that carry a 90-day manufacturer’s warranty. At the time of purchase,...

    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 $422,000 for these extended warranties (approximately evenly throughout the year).    1.). Prepare journal entries that summarize sales of the extended warranties (assume all credit sales) and any aspects of the warranty that should be recorded during the year. Prepare journal entries that...

  • A.J. Smith Electronics is a retail consumer electronics company that also sells extended warranty contracts for...

    A.J. Smith Electronics is a retail consumer electronics company that also sells extended warranty contracts for many of the products that it carries. The extended warranty provides coverage for three years beyond expiration of the manufacturer’s warranty. In 2019, A.J. Smith sold extended warranties amounting to $1,700,000. The warranty coverage for all of these begins in 2020 and runs through 2022. The total expected cost of providing warranty services on these contracts is $500,000. How should A.J. Smith recognize revenue...

  • Cupola Awning Corporation Introduced a new line of commercial awnings In 2018 that carry a two-year...

    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...

  • Hardin Widget Manufacturing began operations in January 2021. Hardin sells widgets that carry a two-year manufacturer's...

    Hardin Widget Manufacturing began operations in January 2021. Hardin sells widgets that carry a two-year manufacturer's warranty against defects in workmanship. Hardin's management projects that 1% of the widgets will require repair during the first year of the warranty while approximately 5% will require repair during the second year of the warranty. The widgets sell for $500 each. The average cost to repair a widget is $60. The company sells 70% of the widgets to retail customers who must pay...

  • Hardin Widget Manufacturing began operations in January 2021. Hardin sells widgets that carry a two-year manufacturer's...

    Hardin Widget Manufacturing began operations in January 2021. Hardin sells widgets that carry a two-year manufacturer's warranty against defects in workmanship. Hardin's management projects that 2% of the widgets will require repair during the first year of the warranty while approximately 6% will require repair during the second year of the warranty. The widgets sell for $400 each. The average cost to repair a widget is $60. The company sells 60% of the widgets to retail customers who must pay...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT