Hi, I think I have part 1 correct as listed below, but I need help with the second part with the Accrued Warranty Payable T account in Question 2. 2. Post to the Accrued Warranty Payable T-account. The beginning balance was $20,000. At the end of 2018, how much in accrued warranty payable does Tires USA owe to its customers?Select the appropriate descriptions, and enter the beginning balance and post the entries to the Accrued Warranty Payable T-account. Calculate the balance of the liability account.Accrued Warranty Payable20,900PaymentBeginning balancePaymentEnding balance20,00027,840 Tires USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Tires USA can expect warranty costs during the five-year period to add up to 4% of sales. Assume that a Tires USA dealer in Denver, Colorado,made sales of $696,000 during 2018. Tires USA received cash for 20% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $20,900 during 2018.Read the requirements.1. Record the sales, warranty expense, and warranty payments for Tires USA. (Record debits first, then credits. Exclude explanations from any journal entries.)First, let's record the sale of the tires.AccountsCashNotes ReceivableSales RevenueNow, let's accrue the warranty expense.Journal EntryWarranty ExpenseJournal EntryAccountsAccrued Warranty PayableNext, we will record the payment of warranty expenses.Journal EntryAccountsAccrued Warranty PayableCashDebit139,200556,800Debit27,840Debit20,900Credit696,000Credit27,840Credit20,900

Entries provided for the 1st part are correct. However, the 2nd part is incomplete. Accrued Warranty Payable T-Account has been prepared in the next step.Accrued Warranty Payable A/c Particulars Dr Amount Particulars Cr Amount To Cash 20,900 By Balance b/d 20,000 To Balance c/d 26,940 By Warranty Expense 27,840 47,840 47,840 Balance of the Liability Account is $26,940 (Cr)

Business

Accounting

2. Post to the Accrued Warranty Payable T-account. The beginning balance was $20,000. At the end of 2018, how much in accrued warranty payable does Tires USA owe to its customers? Select the appropriate descriptions, and enter the beginning balance and post the entries to the Accrued Warranty Payable T-account. Calculate the balance of the liability account. Accrued Warranty Payable Payment 20,900 Beginning balance Payment Ending balance 20,000 27,840

2. Post to the Accrued Warranty Payable T-account. The beginning balance was $20,000. At the end of 2018, how much in accrued warranty payable does Tires USA owe to its customers? Select the appropriate descriptions, and enter the beginning balance and post the entries to the Accrued Warranty Payable T-account. Calculate the balance of the liability account. Accrued Warranty Payable Payment 20,900 Beginning balance Payment Ending balance 20,000 27,840

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

8. When specified receivables are used to secure for a loan on a notification basis, which accounting treatment is required? Only a note to financial statement is required The borrower notifies the debtor that their receivables were assigned the borrower should not notify the debtor that their receivables were assigned Notify the debtor that their receivable was sold
When do businesses record warranty expenses, and why?
4)What’s the difference between doubtful debt and bad debt? 5) How do I create an allowance for doubtful accounts entry?
In Promissory note, Maker is the person who. a. Receives the payment b. Makes the sales c. Makes the promise d. Receives the Cash
Can you tell me some examples of liability accounts?
Ef 15.
Explain the term Cheque Endorsement, and the conditions necessary for an endorsement of a cheque to be effective.
Explain and define deeply the three (3) types of electronic payment. Cite some situational examples.
Fill in the blanks to complete sentence. 9.The loan guarantee is issued at the request of the __________ in favor of __________
4. Which of the following statements about promissory notes is incorrect? a. Interest is the revenue to the maker of the note b. The party making the promise to pay is the debtor c. The party to whom payment is to be made is the creditor d. The maturity date of the note is the date when final payment of the note is due
Describe the accounting treatment for an assurance-type warranty and for a service-type warranty.
What accounts are used to record a contingent warranty liability that is probable and estimable buthas yet to be fulfilled?A. warranty liability and cashB. warranty expense and cashC. warranty liability and warranty expense, cashD. warranty expense and warranty liability