3. Hampton Manufacturing began operations in January 2024. Hampton sells computers that carry a two-year manufacturer's warranty against defects in workmanship. Hampton's management projects that 2% of the computers will require repair during the first year of the warranty, while approximately 6% will require repair during the second year of the warranty. The computers sell for $1,000 each. The average cost to repair a computer is $300. The company sells 100% of the computers to retail customers who must pay a 7% sales tax. Sales and warranty information for 2024 and 2025 are as follows: I 2024: Sold 400 computers on account; incurred warranty expenditures of $2,000. 2025: Sold 800 computers on account; incurred warranty expenditures of $15,000. INSTRUCTIONS: a. Prepare journal entries that summarize the sales and all aspects of the warranty for 2024. b. Prepare journal entries that summarize the sales and all aspects of the warranty for 2025.

3. Hampton Manufacturing began operations in January 2024. Hampton sells computers that carry a two-year manufacturer's warranty against defects in workmanship. Hampton's management projects that 2% of the computers will require repair during the first year of the warranty, while approximately 6% will require repair during the second year of the warranty. The computers sell for $1,000 each. The average cost to repair a computer is $300. The company sells 100% of the computers to retail customers who must pay a 7% sales tax. Sales and warranty information for 2024 and 2025 are as follows: I 2024: Sold 400 computers on account; incurred warranty expenditures of $2,000. 2025: Sold 800 computers on account; incurred warranty expenditures of $15,000. INSTRUCTIONS: a. Prepare journal entries that summarize the sales and all aspects of the warranty for 2024. b. Prepare journal entries that summarize the sales and all aspects of the warranty for 2025.

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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