4). These warranty contracts are not sold separately from the computers. Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2025, a cash sale was made. 400 computers were sold, each with a unit price of $2,500. On the basis of past experience, the 2-year warranty costs are estimated to be $155 for parts and $185 for labor per unit. For simplicity, assume that all sales occurred on December 31, 2025. During 2026, the actual warranty costs to Brooks Corporation were $21,400 for parts and $39,9000 for labor. HINT: Chapter-12, Assurance-Type Warranty, Example 12.16 REQUIRED: 4A). 4B). 4C). A journal entry to record: ● The sales revenue for 2025. The warranty liability as of December 31, 2025 As of December 31, 2025, the Balance Sheet presentation for Current-Liabilities and Long-Term Liabilities. A journal entry, for 2026, to record the actual warranty costs.

4). These warranty contracts are not sold separately from the computers. Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2025, a cash sale was made. 400 computers were sold, each with a unit price of $2,500. On the basis of past experience, the 2-year warranty costs are estimated to be $155 for parts and $185 for labor per unit. For simplicity, assume that all sales occurred on December 31, 2025. During 2026, the actual warranty costs to Brooks Corporation were $21,400 for parts and $39,9000 for labor. HINT: Chapter-12, Assurance-Type Warranty, Example 12.16 REQUIRED: 4A). 4B). 4C). A journal entry to record: ● The sales revenue for 2025. The warranty liability as of December 31, 2025 As of December 31, 2025, the Balance Sheet presentation for Current-Liabilities and Long-Term Liabilities. A journal entry, for 2026, to record the actual warranty costs.

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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