Journal Entries | |||
Date | Account Title and explanation | Debit | Credit |
a | |||
2017 | Cash | $ 10,44,600 | |
To Sales | $ 10,44,600 | ||
(To Record the sales) | |||
2017 | Warranty Expenses | $ 1,35,320 | |
To Estimated Warranty Payables | $ 1,35,320 | ||
(To Record the warranty Expenses) | |||
During 2017 | Estimated Warranty Payables | $ 74,380 | |
To Inventory | $ 74,380 | ||
(To Record the warranty Claims) | |||
December 31, 2017 | "No Entry" | $ - | |
Brief Exercise 13-13 Larkspur Factory provides a 2-year warranty with one of its products which was...
Brief Exercise 13-13 Teal Factory provides a 2-year warranty with one of its products which was first sold in 2017. Teal sold $986,900 of products subject to the warranty. Teal expects $117,650 of warranty costs over the next 2 years. In that year, Teal spent $65,190 servicing warranty claims. Prepare Teal’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select...
Brief Exercise 13-13 Bonita Factory provides a 2-year warranty with one of its products which was first sold in 2017. Bonita sold $909,800 of products subject to the warranty. Bonita expects $124,480 of warranty costs over the next 2 years. In that year, Bonita spent $73,090 servicing warranty claims. Prepare Bonita’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select...
Teal Factory provides a 2-year warranty with one of its products which was first sold in 2017. Teal sold $986,900 of products subject to the warranty. Teal expects $117,650 of warranty costs over the next 2 years. In that year, Teal spent $65,190 servicing warranty claims. Prepare Teal’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for...
Ivanhoe Factory provides a 2 year warranty with one of its products which was first sold in 2020. Ivanhoe sold $1,010,100 of products subject to the warranty. Ivanhoe expects $113,910 of warranty costs over the next 2 years. In that year, Ivanhoe spent $63,100 service warranty cains. Prepare Ivanhoe's Journal entry to record the sales (Ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. Of no entry is required, select "No Entry"...
Your answer is partially correct. Try again. Flounder Factory provides a 2-year warranty with one of its products which was first sold in 2020. Flounder sold $976,100 of products subject to the warranty. Flounder expects $119,940 of warranty costs over the next 2 years. In that year, Flounder spent $64,080 servicing warranty claims. Prepare Flounder’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no...
Concord Factory provides a 2-year warranty with one of its products which was first sold in 2017. Concord sold $932,500 of products subject to the warranty. Concord expects $137,130 of warranty costs over the next 2 years. In that year, Concord spent $66,530 servicing warranty claims. Prepare Concord’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.
Jupiter Corp. provides at no extra charge a two-year warranty with one of its products, which was first sold in 2017. In that year, Jupiter sold products for $2.5 million and spent $68,000 servicing warranty claims. At year end, Jupiter estimates that an additional $420,000 will be spent in the future to service warranty claims related to the 2017 sales. Prepare Jupiter's journal entry(ies) to record the sale of the products, the $68,000 expenditure, and the December 31 adjusting entry...
Brief Exercise 13-14 Sheridan Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Sheridan sold 20,000 warranty contracts at $108 each. The corporation spent $175,000 servicing warranties during 2020, and it estimates that an additional $875,000 will be spent in the future to service the warranties. Your answer is partially correct. Try again. Prepare Sheridan's journal entry for the sale of contracts. Assume the service costs are inventory costs. (If no entry is...
Problem 13-10 Tamarisk Inc. sells portable computer equipment with a two-year warranty contract that requires the corporation to replace defective parts and provide the necessary repair labour During 2017, the corporation sells for cash 383 computers at a unit price of $2,500. Based on experience, the two-year warranty costs are estimated to be $168 for parts and $172 for labour per unit. (For simplicity, assume that all sales occurred on December 31, 2017.) The warranty is not sold separately from...
Exercise 13-11 Early in 2017, Grouper Equipment Company sold 500 Rollomatics during 2017 at $5,900 each. During 2017, Grouper spent $18,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. Prepare 2017 entries for Grouper. Assume that Grouper estimates the total cost of servicing the warranties will be $55,000 for 2 years. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...