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

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