Question

11 & 12

Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $510,000. Actual warranty expenditures in January of the following year were $18,500.

11- 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

12- 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3?

2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transacti View transaction list Journal entry worksheet 2 Record the contingent liability for warranties. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

	CALCULATION OF THE ESTIMATED WARRANTY LIABILITES
	Total Sales	$               5,10,000
	Estimated of Warranty Expenditures = 6% of $ 510,000	$                  30,600
Journal Entries
Date	Account Title and explanation	Debit	Credit
Answer =1)	Warranty Expenses	$                  30,600
	To Estimated Warranty Liabilites		$                     30,600
	(To Record the warranty Expenses of the year)
Answer =2)	Estimated Warranty Liabilites	$                  18,500
	To Parts Inventory - Note book Computer		$                     18,500
	(To Record the consumption of warranty)
	CALCULATION OF THE BALANCE IN WARRANTY LIABILITES
	Estimated Warranty Liabilites =	$                  30,600
Answer =3)	Less: Expenses incurred in the month of January	$                  18,500
	Balance of Warranty Expenses	$                  12,100
	Answer = $ 12,100