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Lee Electronics, a franchise of electronics stores located in small towns throughout the United States, sold 780 32-inch televisions for $470 each. The televisions carry an attached 3-year warranty for repairs. Lee Electronics estimates that repair costs will average 5% of the total selling price. Required:

Lee Electronics, a franchise of electronics stores located in small towns throughout the United States, sold 780 32-inch televisions for $470 each. The televisions carry an attached 3-year warranty for repairs. Lee Electronics estimates that repair costs will average 5% of the total selling price. Required:

FINANCIAL ACCOUNTING
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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Warranties Lee Electronics, a franchise of electronics stores located in small towns throughout the United States, sold 780 32-inch televisions for $470 each. The televisions carry an attached 3-year warranty for repairs. Lee Electronics estimates that repair costs will average 5% of the total selling price. Required: 1. How much is recorded in the Warranty Liability account as a result of selling the televisions during the year, assuming no warranty service has yet been performed? estimated warranty liability 2. Provide the necessary adjusting entry at December 31. If an amount box does not require an entry, leave it blank. Dec. 31 88 (Record warranty expense)
Transcribed Image Text:Warranties Lee Electronics, a franchise of electronics stores located in small towns throughout the United States, sold 780 32-inch televisions for $470 each. The televisions carry an attached 3-year warranty for repairs. Lee Electronics estimates that repair costs will average 5% of the total selling price. Required: 1. How much is recorded in the Warranty Liability account as a result of selling the televisions during the year, assuming no warranty service has yet been performed? estimated warranty liability 2. Provide the necessary adjusting entry at December 31. If an amount box does not require an entry, leave it blank. Dec. 31 88 (Record warranty expense)
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