4. Analyze the estimated warranty liability account toascertain whether actual warranty costs approximate theestimate. The sales and warranty repairs are made evenlyduring the year.5. Prepare journal entry to correct the estimated warrantyliability on December 31, 2021. Problem 3-1 (IAA)arepair warranty The sale price for each set is P15,000. Theaverage repair cost per set is P800.Research has shown that 20% of all sets sold are repaired inthe first year and 40% in the second year.20202021300500150,000Number of sets sold40,000Total payments'for warranty repairs

Warranty refers to the guarantee in which the manufacturer of the goods promises to replace the good…

4. Analyze the estimated warranty liability account to ascertain whether actual warranty costs approximate the estimate. The sales and warranty repairs are made evenly during the year. 5. Prepare journal entry to correct the estimated warranty liability on December 31, 2021.

4. Analyze the estimated warranty liability account to ascertain whether actual warranty costs approximate the estimate. The sales and warranty repairs are made evenly during the year. 5. Prepare journal entry to correct the estimated warranty liability on December 31, 2021.

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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Question

4. Analyze the estimated warranty liability account to
ascertain whether actual warranty costs approximate the
estimate. The sales and warranty repairs are made evenly
during the year.
5. Prepare journal entry to correct the estimated warranty
liability on December 31, 2021.

Problem 3-1 (IAA)
a
repair warranty The sale price for each set is P15,000. The
average repair cost per set is P800.
Research has shown that 20% of all sets sold are repaired in
the first year and 40% in the second year.
2020
2021
300
500
150,000
Number of sets sold
40,000
Total payments'for warranty repairs

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