Charm Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2019. Net Sales P 3,200,000 Warranty Liability account: Balance, Jan. 1, 2019 10,000 debit before adjustment Balance , Dec. 31, 2019 54,000 credit after adjustment. Which of the following entries was made to record the 2019 estimated warranty expense? * A.Debit Warranty Expense 64,000 and Credit Estimated liability under warranties 64,000 B.Debit warranty Expense 64,000 Credit Accumulated profits/losses 10,000 and Estimated liability under warranties 54,000 C.Debit Warranty Expense 54,000 and Accumulated profits/losses 10,000 and Credit Estimated liability under warranties 64,000 D.Debit Warranty Expense 44,000 and Credit Estimated liability under warranties 44,000
Charm Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2019. Net Sales P 3,200,000 Warranty Liability account: Balance, Jan. 1, 2019 10,000 debit before adjustment Balance , Dec. 31, 2019 54,000 credit after adjustment. Which of the following entries was made to record the 2019 estimated warranty expense? * A.Debit Warranty Expense 64,000 and Credit Estimated liability under warranties 64,000 B.Debit warranty Expense 64,000 Credit Accumulated profits/losses 10,000 and Estimated liability under warranties 54,000 C.Debit Warranty Expense 54,000 and Accumulated profits/losses 10,000 and Credit Estimated liability under warranties 64,000 D.Debit Warranty Expense 44,000 and Credit Estimated liability under warranties 44,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Charm Company estimates its annual warranty expense as 2% of annual net sales. The following data relate to calendar year 2019. Net Sales P 3,200,000 Warranty Liability account: Balance, Jan. 1, 2019 10,000 debit before adjustment Balance , Dec. 31, 2019 54,000 credit after adjustment. Which of the following entries was made to record the 2019 estimated warranty expense? *
A.Debit Warranty Expense 64,000 and Credit Estimated liability under warranties 64,000
B.Debit warranty Expense 64,000 Credit Accumulated profits /losses 10,000 and Estimated liability under warranties 54,000
C.Debit Warranty Expense 54,000 and Accumulated profits/losses 10,000 and Credit Estimated liability under warranties 64,000
D.Debit Warranty Expense 44,000 and Credit Estimated liability under warranties 44,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education