Ecco Company sold $155,000 of kitchen appliances with six-month warranties durin September. The cost to repair defects under the warranty is estimated at 5% of the sales price. On October 15, a customer required a $120 part replacement, plus $90 labor under the warranty. Required: Provide the journal entry for (a) the estimated expense on September 30 and (b) the October 15 warranty work. Refer to the Chart of Accounts for exact wording of account titles.
Ecco Company sold $155,000 of kitchen appliances with six-month warranties durin September. The cost to repair defects under the warranty is estimated at 5% of the sales price. On October 15, a customer required a $120 part replacement, plus $90 labor under the warranty. Required: Provide the journal entry for (a) the estimated expense on September 30 and (b) the October 15 warranty work. Refer to the Chart of Accounts for exact wording of account titles.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 10RE
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![Ecco Company sold $155,000 of kitchen appliances with six-month warranties during
September. The cost to repair defects under the warranty is estimated at 5% of the
sales price. On October 15, a customer required a $120 part replacement, plus $90
labor under the warranty.
Required:
Provide the journal entry for (a) the estimated expense on September 30
and (b) the October 15 warranty work. Refer to the Chart of Accounts for
exact wording of account titles.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd210f98b-1208-4eea-a54e-043fbbd49724%2F45bc140a-13a4-4351-ad23-97d6fc005197%2Fmp36uz_processed.png&w=3840&q=75)
Transcribed Image Text:Ecco Company sold $155,000 of kitchen appliances with six-month warranties during
September. The cost to repair defects under the warranty is estimated at 5% of the
sales price. On October 15, a customer required a $120 part replacement, plus $90
labor under the warranty.
Required:
Provide the journal entry for (a) the estimated expense on September 30
and (b) the October 15 warranty work. Refer to the Chart of Accounts for
exact wording of account titles.
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