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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text: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.
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