Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (C) The recognition of warranties revenue
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A: Journal entries refers to the process of recording the financial transactions of a company in its…
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A: The warranty Expenseis the estimated expense to be made for the sales made during the period.
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A: The warranty Expenses are estimated on the basis of sales revenue earned during the period.
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A: Accounting equation is the basic principle of accounting which works in the a standardized form of…
Q: B8 Inc's sales during 2021 totaled $375,000, and the company estimates that warranty costs will be…
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Q: Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During…
A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…
Q: Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: ABC Company started its business in 2019. It sells an equipment with a 3- year warranty. ABC…
A: Warranty expense can be define as an expense for a company which is offered by the company to their…
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A: Warranty revenue recognized = Unearned warranty revenue / Contract term
Q: Green Company started business in 2020. It sells printers with a three-year warranty. Green…
A: Warranty expense is the total warranty claim for product =2%+4%+6% =12%
Q: ABC Company started its business in 2019. It sells an equipment with a 3- year warranty. ABC…
A: Warranty Liability as on December 31,2020 = Total Warranty Expense till 2020 - Actual Warranty…
Q: In 2020, Eastern Appliance Manufacturing introduced a fully automatic washing machine with dryer.…
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A: A warranty liability is liability account that reports the estimated amount that a company will have…
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Q: Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020…
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A: Formula: Sales revenue = Sales units x Sales price per unit
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A: Journal entry is a primary entry that records the financial transactions initially.
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- Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 AI Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (c) The recognition of warranties revenueAl Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (c) The recognition of warranties revenue5. Al Jabel Corporation sells WIFI speakers and offers 2- year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing waranties (c) The recognition of warranties revenue
- Leppard Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Leppard sold 20,000 warranty contracts at $99 each. The corporation spent $180,000 servicing warranties during 2020. Prepare Leppard’s journal entries for (a) the sale of contracts, (b) the cost of servicing the warranties, and (c) the recognition of warranty revenue. Assume the service costs are inventory costs.Carla Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Carla sold 20,000 warranty contracts at $132 each. The corporation spent $173,000 servicing warranties during 2020, and it estimates that an additional $865,000 will be spent in the future to service the warranties. Prepare Carla’s journal entry for the sale of contracts. Assume the service costs are inventory costs Prepare Carla’s journal entry for the cost of servicing the warranties. Assume the service costs are inventory costs Prepare Carla’s journal entry for the recognition of warranty revenue. Assume the service costs are inventory costs.Erafone provides a 2-year warranty with one of its products which was first sold in 2020. Erafone sold $1,000,000 of products subject to the warranty. Era Phone expects $125,000 of warranty costs over the next 2 years. In 2020, Erafone spent $70,000 servicing warranty claims. Prepare journal entries in 2020 to record the costs incurred in honoring the warranties (assume expenditures are for repair part costs):
- In 2020, Pluto Company started selling new computer that carried a 2-year warranty against defects. Based on the manufacturer's recommendations, the entity estimated warranty cost as a percentage of sales.First year of warranty - 3%Second year of warranty - 9% 2020 2021 Sales 5,000,000 7,000,000 Actual warranty repairs 100,000 250,000 Prepare the necessary journal entries to record this transaction, using the expense as incurred approach, for the years 2020 and 2021.ABC Inc. sells medical equipment. ABC provides its customers anoption to purchase a three-year warranty. Warranty contracts sold on 2021, 2022 and2023 are P720,000, 864,000 and 1,004,000, respectively. Management expects that:20% of warranty costs are done in the 1st year from the date of sale.30% of warranty costs are done in the 2nd year from the date of sale.50% of warranty costs are done in the 3rd year from the date of sale.Actual costs incurred on repairs are P25,000, 100,000 and 200,000, respectively.What amount should be reported as liability on warranties on December 31, 2021, 2022and 2023?Flint Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Flint sold 20,000 warranty contracts at $84 each. The corporation spent $170,000 servicing warranties during 2020, and it estimates that an additional $850,000 will be spent in the future to service the warranties. Prepare Flint's journal entry for the sale of contracts. Assume the service costs are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation eTextbook and Media List of Accounts Debit Credit Prepare Flint's journal entry for the cost of servicing the warranties. Assume the service costs are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered.…
- Skysong Factory provides a 2-year warranty with one of its products which was first sold in 2025. Skysong sold $997,500 of products subject to the warranty. Skysong expects $120,250 of warranty costs over the next 2 years. In that year, Skysong spent $71,080 servicing warranty claims. Prepare Skysong's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 12/31/25 Account Titles and Explanation (To record payment for warranty costs incurred) (To record sales) Debit Credit 1Feller, Inc. sells a certain machine for $40,000. Included in this price is an implied service-type warranty of $1,000. Fifty machines were sold in 2020. Warranty claims incurred during 2020 amounted to $21,000. Required: Determine the amount of sales that Feller, Inc. should record for 2020.Streep Factory provides a 2-year warranty with one of its products which was first sold in 2020. Streep sold $1,000,000 of products subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.
