Macrosoft Company sells a line of computers that carry a basic manufacturer’s warranty. In addition, customers...
Macrosoft Company sells a line of computers that carry a basic
manufacturer’s warranty. In addition,
customers are offered the opportunity to buy a two-year
service-type (extended) warranty for an
additional charge. The extended warranty period begins on the date
of the product sale. In 2021:
(1) Macrosoft sold $320,000 of these extended warranties (all on
credit, all on January 1 [silly
assumption, I know, but I’m trying to make the accounting easier in
this problem]), and
(2) actual expenditures under the extended warranties were $17,250,
of which $15,000 was for
parts (in inventory) and $2,250 was for labor (not paid as of
12/31).
Required
Prepare journal entries to record all activity related to these
extended warranties in 2021.
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Macrosoft Company sells a line of computers that carry a basic
manufacturer’s warranty. In addition,
customers...
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