Nash Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2020, the corporation sells for cash 365 computers at a unit price of $2,360. On the basis of past experience, the 2-year warranty costs are estimated to be $140 for parts and $190 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2020.) The warranty is not sold separately from the computer. (a) Your answer has been saved. See score details after the due date. Record any necessary journal entries in 2020. (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 the amount is entered. Do not indent manually.) Account Titles and Explanation Cash Warranty Expense Sales Revenue Warranty Liability Nash Corporation Balance Sheet (Partial) $ Debit $ 861,400 V 120,450 What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it be classified? Credit 861,400 120,450

Nash Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2020, the corporation sells for cash 365 computers at a unit price of $2,360. On the basis of past experience, the 2-year warranty costs are estimated to be $140 for parts and $190 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2020.) The warranty is not sold separately from the computer. (a) Your answer has been saved. See score details after the due date. Record any necessary journal entries in 2020. (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 the amount is entered. Do not indent manually.) Account Titles and Explanation Cash Warranty Expense Sales Revenue Warranty Liability Nash Corporation Balance Sheet (Partial) $ Debit $ 861,400 V 120,450 What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it be classified? Credit 861,400 120,450

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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