Echo manufactures and sells printers. They recently introduced a new laser printer that sells for $1,000 and offers a 1-year service warranty to customers for $120. Each laser printer cost Delta $400 to manufacture. Typically, 20% of customers purchase the service warranty and warranty costs are estimated to be $20 per printer sold. Delta sells 600 printers to retailers on July 1, xxx1. 4. Record the July 1, xxx1 journal entry. 5. Record the July 31, xxx1 journal entry to record warranty expenses, assuming that calls upon the warranty occur evenly over the life of the warranty. 6. Record the December 31, xxx1 adjusting journal entries for any remaining estimated warranty expense and to amortize unearned warranty revenue.
Echo manufactures and sells printers. They recently introduced a new laser printer that sells for $1,000 and offers a 1-year service warranty to customers for $120. Each laser printer cost Delta $400 to manufacture. Typically, 20% of customers purchase the service warranty and warranty costs are estimated to be $20 per printer sold. Delta sells 600 printers to retailers on July 1, xxx1. 4. Record the July 1, xxx1 journal entry. 5. Record the July 31, xxx1 journal entry to record warranty expenses, assuming that calls upon the warranty occur evenly over the life of the warranty. 6. Record the December 31, xxx1 adjusting journal entries for any remaining estimated warranty expense and to amortize unearned warranty revenue.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer / solve all parts within 30 minutes.
Transcribed Image Text:Warranties - Service
Echo manufactures and sells printers. They recently introduced a new laser printer that sells for $1,000 and offers a 1-year service warranty to customers
for $120. Each laser printer cost Delta $400 to manufacture. Typically, 20% of customers purchase the service warranty and warranty costs are estimated
to be $20 per printer sold. Delta sells 600 printers to retailers on July 1, xxx1.
4.
Record the July 1, xxx1 journal entry.
5.
6.
Record the July 31, xxx1 journal entry to record warranty expenses, assuming that calls upon the warranty occur evenly over the life of the warranty.
Record the December 31, xxx1 adjusting journal entries for any remaining estimated warranty expense and to amortize unearned warranty revenue.
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