Leaky Black sells cars for $30,000 (cost to Leaky of 15,000) that come with a 2 year assurance-type warranty and the option for a 3 year extended warranty (beginning in year 3) for $5,000. The estimated warranty costs associated with the assurance type warranty are $2,000. The actual warranty costs are as follows: $500, $1,500, $1,000, S500, $2,000 for years 1- 5 respectively. Prepare all journal entries.

Leaky Black sells cars for $30,000 (cost to Leaky of 15,000) that come with a 2 year assurance-type warranty and the option for a 3 year extended warranty (beginning in year 3) for $5,000. The estimated warranty costs associated with the assurance type warranty are $2,000. The actual warranty costs are as follows: $500, $1,500, $1,000, S500, $2,000 for years 1- 5 respectively. Prepare all journal entries.

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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