Kingbird Factory provides a 2-year warranty with one of its products which was first sold in 2025. Kingbird sold $932,300 of productssubject to the warranty. Kingbird expects $118,280 of warranty costs over the next 2 years. In that year, Kingbird spent $72,730servicing warranty claims. Prepare Kingbird's journal entry to record the sales (ignore cost of goods sold) and the December 31adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indentmanually. List all debit entries before credit entries.)DateDuring 202512/31/25Account Titles and Explanation(To record payment for warranty costs incurred)(To record sales)DebitCredit

Summary:-Journal entry is providedExplanation:

Answered: Kingbird Factory provides a 2-year…

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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Patterson Limited offers a 12-month warranty for the sale of used motorbikes. On 1 April 2021, the beginning of the financial year, there was a credit balance of $280,000 in its Warranty Provision account. During the year ended 31 March 2022, Patterson Limited incurred $260,000 in warranty costs for spare parts. At 31 March 2022, Patterson Limited estimated its liability for unexpired warranty contracts as $300,000. Prepare the necessary period end general journal entry to record the update required to the warranty provision, assuming an annual accounting period.
Kimber Sales offers warranties on all their electronic goods. Warranty expense is estimated at 3.5% of sales revenue. In 2018, Kimber had $333,000 of sales. In the same year, Kimber paid out $8,750 of warranty payments. Provide the journal entry to record the warranty expense. What is the balance of the liability account? Account name Debit Credit
Bon Jovie Industries warrants its products for one year. The estimated product warranty is 4.3% of sales. Sales were $475,000 for September. In October, a customer received warranty repairs requiring $215 of parts and $65 of labor. Required: Journalize the adjusting entry required at September 30, the end of the first month of the current year, to record the estimated product warranty expense. Journalize the entry to record the warranty work provided in October.
Best Appliance Store offers a two-year warranty on all appliances sold. The company estimates that 5% of all appliances sold need to be serviced at an average cost of $50 each. At December 31, 2020, the Warranty Liability account had a balance of $19,000. During 2021, the store spends $10,000 repairing 200 appliances. An additional 3,500 appliances are sold in 2021. On the 2021 income statement, warranty expense will be: Oa. $8,750 b. $10,000 CC $8,500 d. $9,000
Boston Company sells baked bean making machines and guarantees them for three years. Company experience shows that warranty costs are about 5% of sales. Boston Company made sales of totaling $1,650,000 during 2021. The cost of the machines sold was $1,072,500. For the first quarter ending March 31, 2022, Boston Company paid out $16,550 of costs related to satisfying warranty repairs. In journal provided: a. Record the baked bean making machine sales for 2021 assuming all sales were on account. b. Record the warranty expense for 2021. c. Record the payment of warranty expenses for the quarter-ended March 31, 2022. Assume all expenses are paid in cash for repairs. d. Determine the ending balance in the Estimated Warranty Liability account as…
Martinez Factory provides a 2-year warranty with one of its products which was first sold in 2025. Martinez sold $909,800 of products subject to the warranty. Martinez expects $124,480 of warranty costs over the next 2 years. In that year, Martinez spent $73,090 servicing warranty claims. Prepare Martinez'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 20
Sales revenue for Booker Company for 2023 amounted to $800,000. The products sold carry a six-month warranty. Management estimates the cost of the warranty to be 3% of sales revenue. Booker should record journal entries: DR. (Enter two words only) CR. (Enter two words only)
Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $373,000 for January. In February, a customer received warranty repairs requiring $130 of parts and $90 of labor. Question Content Area a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. blank CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages Payable - Select - - Select - CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages Payable - Select - - Select - Question Content Area b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. blank CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages Payable - Select - - Select - Accounts PayableAccounts ReceivableProduct…
Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000. Marques adjusts its accounts monthly. A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022. Instructions: a) Prepare the adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022.
jay
On December 1, XYZ Limited introduces a new product that includes a one-year warranty on parts. In November, 1000 units are sold. Management believes that 15% of the units will be defective and that the average warranty costs will be $50 per unit. Prepare the adjusting entry at November 30 to accrue the estimated warranty cost.
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,987 units. It is estimated that warranty repairs will average $17 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of a.$35,545 b.$0 c.$50,779 d.$15,234

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