Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $2,990 of accrued vacation benefits for the year. 2. During December, Maxum Company sold 3,400 units of a product that carries a 60-day warranty. December sales for this product total $139,000. The company expects 9% of the units to need warranty repairs, and it estimates the average repair cos per unit will be $15. Prepare adjusting entries at December 31 for Maxum Company's year-end financial statements for each of the above separate transactions.
Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $2,990 of accrued vacation benefits for the year. 2. During December, Maxum Company sold 3,400 units of a product that carries a 60-day warranty. December sales for this product total $139,000. The company expects 9% of the units to need warranty repairs, and it estimates the average repair cos per unit will be $15. Prepare adjusting entries at December 31 for Maxum Company's year-end financial statements for each of the above separate transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Listed below are a few transactions and events of Maxum Company.
1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $2,990 of accrued vacation
benefits for the year.
2. During December, Maxum Company sold 3,400 units of a product that carries a 60-day warranty. December sales for this
product total $139,000. The company expects 9% of the units to need warranty repairs, and it estimates the average repair cost
per unit will be $15.
Prepare adjusting entries at December 31 for Maxum Company's year-end financial statements for each of the above separate
transactions.
View transaction list
Journal entry worksheet
A
B
Employees earn vacation pay at a rate of one day per month. Maxum
estimated and must expense $2,990 of accrued vacation benefits for the year.
Record the related adjusting entry.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
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