19A computer manufacturing company produced 600 computers this year. The company provides a two-year warranty to their customers on the computers. The company estimates that the warranty cost perunit will be $75 per computer. The company sold 550 of the computers this year. The actual warranty cost this year on these computers averaged $80 per computer. These warranties were honored by cashpayments to the customers.Which journal entry should be made during the year to record the warranty cost?Debit Warranty Expense for $41,250; Credit Cash for $41,250Debit Warranty Expense for $44,000; Credit Cash for $44,000Debit Warranty Expense for $48,000; Credit Cash for $48,000Debit Warranty Expense for $45,000; Credit Cash for $45,000

We use the actual warranty expenses to record journal entries.We are given the following…

Answered: 19 A computer manufacturing company…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 10RE

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Consumer Corp. sells dishwashers and washing machines that come with a two-year unlimited warranty on parts and labour for repairs. The warranty is intended to assure customers that the appliances will operate as advertised. The warranty is expected to cost 4% of sales in the first year and 6% of sales in the second year, for a total of 10%. The provision for warranty has a credit balance of $161,000 at the beginning of 20X5. The following events and decisions relate to the warranty: 20X5 Sales revenue of $4,750,000 was generated from products covered by the warranty. Both the sale and the warranty provision must be recorded. 20X5 Warranty work consumed parts inventory with a cost of $8,500, and labour of $35,000. 20X6 Sales revenue from products covered by the warranty were $6,750,000. Both the sale and the warranty provision must be recorded. 20X6 Sales revenue of $6,750,000 was generated from products covered by the warranty. Warranty work…
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Refer to the photo
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New Age Computers manufactures and sells pagers and radio paging systems which include a 180-day assurance warranty on product defects. The company estimates the value of the 180-day warranty to be $3,000. New Age also sells an extended warranty which provides an additional two years of protection. On May 10, the company sold a paging system for $4,500 with an extended warranty for another $1,400. The journal entry to record this transaction would be: OA. B. OD. Cash Sales revenue Unearned warranty revenue Cash Accounts receivable Sales revenue Service revenue Cash Sales revenue Cash Sales revenue Unearned warranty revenue Debit 5,900 Debit 4,500 1,400 Debit 8,900 Debit 8,900 Credit 4,500 1,400 Credit 4,500 1,400 Credit 8,900 Credit 7,500 1,400
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