A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500. **Journal Entry Worksheet for Educational Purposes****Instructions:**2. & 3. Record the necessary entries in the Journal Entry Worksheet below. *(If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)***Journal Entry Worksheet**- **Tab Navigation:** Tabs are available to switch between different transactions/events. The tabs are labeled numerically, with the current view on tab "1" and an option to switch to "2".- **Task Description:** - "Record the contingent liability for warranties."- **Note:** - Enter debits before credits.**Worksheet Layout:**| Transaction | General Journal | Debit | Credit ||-------------|-----------------|-------|--------|| 1 | | | || | | | || | | | || | | | || | | | || | | | |- **Action Buttons:** - "Record entry" — to save the current entry. - "Clear entry" — to reset the current worksheet. - "View general journal" — to see the entire journal.This worksheet is designed to facilitate the recording of transactions involving contingent liabilities related to warranties. Always ensure debits are entered before credits for accurate accounting records.

Warranty is estimated at $26,500 ($530,000*5%) On December 31.

A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500.

A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500.

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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