4b The company ΨΗΦΙΔΑ Α.Ε. produces electronic components used in the manufacture of mixers. The company provides a one-year warranty for good operation. In the event that any of the components show a defect, ΨΗΦΙΔΑ Α.Ε. undertakes to replace it at no cost to the purchaser. On 31/12/20X2, based on data from previous years, 2% of the sold components are expected to be replaced in the following year as defective, with an estimated cost of €24,000. Based on the company’s accounting records on 31/12/20X2, the warranty cost amounted to €4,000.Required: Record the relevant accounting journal entries
4b The company ΨΗΦΙΔΑ Α.Ε. produces electronic components used in the manufacture of mixers. The company provides a one-year warranty for good operation. In the event that any of the components show a defect, ΨΗΦΙΔΑ Α.Ε. undertakes to replace it at no cost to the purchaser. On 31/12/20X2, based on data from previous years, 2% of the sold components are expected to be replaced in the following year as defective, with an estimated cost of €24,000. Based on the company’s accounting records on 31/12/20X2, the warranty cost amounted to €4,000.Required: Record the relevant accounting journal entries
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4b The company ΨΗΦΙΔΑ Α.Ε. produces electronic components used in the manufacture of mixers. The company provides a one-year warranty for good operation. In the event that any of the components show a defect, ΨΗΦΙΔΑ Α.Ε. undertakes to replace it at no cost to the purchaser. On 31/12/20X2, based on data from previous years, 2% of the sold components are expected to be replaced in the following year as defective, with an estimated cost of €24,000. Based on the company’s accounting records on 31/12/20X2, the warranty cost amounted to €4,000.
Required: Record the relevant accounting
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