Question

td contained the following amounts before adjustment. At 31 December 2015, the trial balance of Credits Debits $300 000 Accounts Receivable $ 1000 Allowance for Doubtful Debts 8 00 000 Sales 2 500 Warrànty Provision (a)During the year ended 31 December 2015, warranty claims cost i argLtd $5000, of which $1000 was for replacement of parts and $4000 was for labour costs. Prepare the journal entry to record the warranty claims during the year ended 31 December 2015 b) Management of aLtd estimated that the liability for unexpired warranty at 31 December 2015 was $3500. Prepare a journal entry to record the adjusting entry to be made for Warranty Provision account. O What type of account is Allowance for Doubtful Debt? What type of account is Warranty Provision? How do you show these two accounts on the statement of financial position?

Answer 1

Answor @ porepare -the Tourna! entry to vecord -the aanty cloimy during ended • the year 31 Dec 2015! Debit) Guncral Jounnal Date feamaty_cxpne inuerday Lasfuguie 5,000 31Decembora015 1000 entor HI00. to be mada a Journal entry -to record -the adjusting y pipare for wamanty provision acount - Debitre) coredulck) Geneval Tounal. Date 1o00 boananty_expene uaxanty provision. FTo incriadk wananty provision : 3500 tiability at énd-2s00 Eisting Jo00 ->Allowance fo doubtfal de bt is a contra asset account' d subtraclion firom acounts y amay Yeceivable under cerrent asset section d balance sheet. . which is shoun

current acset Accounts recivable less Allowance foi daibtful acrount XxX which is biability vaniy provision is ceamnent from podod. "poting porisd. to be due cwithin one currend Srability comanty porovision XXX