LP Corporations sells smart televisions. The corporation also offers its customers a 2 year warranty contract. During 2019, LP sold 20,000 warranty contracts at P990 each. The corporation spent P1, 800,000 servicing warranties during 2019 and it estimates that an additional P9,000,000 will be spent in the future to service the warranties. Prepare LP Corporation’s journal entries for (a) the sale of contracts (b) the cost of servicing warranties and (c) the recognition of warranty revenue.
LP Corporations sells smart televisions. The corporation also offers its customers a 2 year warranty contract. During 2019, LP sold 20,000 warranty contracts at P990 each. The corporation spent P1, 800,000 servicing warranties during 2019 and it estimates that an additional P9,000,000 will be spent in the future to service the warranties. Prepare LP Corporation’s journal entries for (a) the sale of contracts (b) the cost of servicing warranties and (c) the recognition of warranty revenue.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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LP Corporations sells smart televisions. The corporation also offers its customers a 2 year warranty contract. During 2019, LP sold 20,000 warranty contracts at P990 each. The corporation spent P1, 800,000 servicing warranties during 2019 and it estimates that an additional P9,000,000 will be spent in the future to service the warranties. Prepare LP Corporation’s
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