Jane Company extends a warranty on children's tablets. They estimate that 3% of tablets will need to be replaced. The sales price of one tablet is $200 and the cost is $100. Total tablet sales were 10,000 tablets for $2,000,000 in 2020. On February 14, 2021, Jane company replaced 30 tablets under warranty. REQUIRED: 1. Prepare the necessary adjusting entry on December 31, 2020 below: 2. Prepare the necessary journal entry on February 14, 2021 below:

Jane Company extends a warranty on children's tablets. They estimate that 3% of tablets will need to be replaced. The sales price of one tablet is $200 and the cost is $100. Total tablet sales were 10,000 tablets for $2,000,000 in 2020. On February 14, 2021, Jane company replaced 30 tablets under warranty. REQUIRED: 1. Prepare the necessary adjusting entry on December 31, 2020 below: 2. Prepare the necessary journal entry on February 14, 2021 below:

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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During 2019, Bonita Industries introduced a new line of machines that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 1% of sales in the year of sale, 2% in the year after sale, and 3% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales Actual Warranty Expenditures 2019 $ 1394000 $ 24000 2020 997000 38000 2021 1394000 90000 $ 3785000 $ 152000 What amount should Bonita report as a liability at December 31, 2021? $ 35820 $0 $ 75100 $ 13940
Sunnyvale Computer Company sells a line of computers that carry a six-month warranty. Customers are offered the opportunity to buy a two-year extended warranty for an additional charge. During 2024, Sunnyvale received $328,000 from customers for these extended warranties. All sales are on credit, and funds are received evenly throughout the year and the warranties go into effect immediately after purchase. Required: Prepare a summary journal entry to record sales of the extended warranties. Also prepare any other entries associated with the warranties that should be recorded during 2024. 1. Record the $328,000 sale of the extended warranties. 2.Record the recognition of revenue from extended warranties for the year ending December 31, 2024.
Pearl Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pearl sold $1,077,700 of products subject to the warranty. Pearl expects $123,000 of warranty costs over the next 2 years. In that year, Pearl spent $63,400 servicing warranty claims. Prepare Pearl'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 Account Titles and Explanation During 2025 12/31/25 Warranty Liability Warranty Expense (To record payment for warranty costs incurred) Warranty Expense Inventory (To record sales) Warranty Expense Warranty Liability Debit 123000 63400 59600 Credit 123000 63400 59600
On January 1, 2019, a company sells a piece of equipment for a list price of $260,000. It receives $30,000 and accepts a note receivable for the remainder. The balance due is on December 31, 2021, and the note pays an annual interest of 3% every December 31st. Required: Assuming the customer’s borrowing rate is 5%, prepare all journal entries for 2019 and 2020 under IFRS.
1. Record journal entries for the following transactions of Hansen Bakery Company. Jan. 1, 2020 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Issued a $265,500 note to customer Jack Bullock as terms of a merchandise sale. The merchandise's cost to Hansen Bakery Company is $89,750. Note contract terms included a 36-month maturity date, and a 4.3% annual interest rate. Hansen Bakery Company records interest accumulated for 2020. Hansen Bakery Company records interest accumulated for 2021. Jack Bullock honors the note and pays in full with cash.
On January 23, 2019, Zenox Company sold $105,000 of furniture on account that had a cost of $82,000. All of Zenox's sales are covered by an unconditional 24-month replacement warranty. Historical data indicates that warranty costs average 2% of the cost of sales. On January 29, 2019, Zenox replaced furniture with a cost of $2,000 that was covered by warranty. Required: a. Prepare the journal entry to record the estimated warranty liability for January. b. Prepare the entry to record the warranty expense incurred in January. c. Assuming the Estimated Warranty Liability account had a credit balance of $740 on January 1, 2019, calculate the balance at January 31, 2019 after the entries above were posted.