On November 10, 2020, Singh Electronics began to buy and resell scanners for $54 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $34. Singh estimates warranty costs based on 15% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST): Nov.Dec.Jan.202015 Sold 4,000 scanners for $216,000 cash.30 Recognized warranty expense for November with an adjusting entry.8 Replaced 150 scanners that were returned under the warranty.15 Sold 7,600 scanners.29 Replaced 40 scanners that were returned under the warranty.31 Recognized warranty expense for December with an adjusting entry.202114 Sold 380 scanners.20 Replaced 52 scanners that were returned under the warranty.31 Recognized warranty expense for January with an adjusting entry. Required:1. How much warranty expense should be reported for November and December 2020?NovemberDecemberTotalWarranty ExpenseWarranty expenseS2. How much warranty expense should be reported for January 2021? (Round your intermediate calculations and final answer to thenearest whole number.)03. What is the balance of the estimated warranty liability as of December 31, 2020?Warranty expense for NovemberWarranty expense for DecemberCost of replacing items in DecemberLiability balance

Calculation of warranty expenses and warranty liability balance are as follows

Answered: Nov. Dec. Jan. 2020 15 Sold 4,000…

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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On November 10, 2020, Singh Electronics began to buy and resell scanners for $54 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $34. Singh estimates warranty costs based on 15% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST):

Nov.
Dec.
Jan.
2020
15 Sold 4,000 scanners for $216,000 cash.
30 Recognized warranty expense for November with an adjusting entry.
8 Replaced 150 scanners that were returned under the warranty.
15 Sold 7,600 scanners.
29 Replaced 40 scanners that were returned under the warranty.
31 Recognized warranty expense for December with an adjusting entry.
2021
14 Sold 380 scanners.
20 Replaced 52 scanners that were returned under the warranty.
31 Recognized warranty expense for January with an adjusting entry.

Required:
1. How much warranty expense should be reported for November and December 2020?
November
December
Total
Warranty Expense
Warranty expense
S
2. How much warranty expense should be reported for January 2021? (Round your intermediate calculations and final answer to the
nearest whole number.)
0
3. What is the balance of the estimated warranty liability as of December 31, 2020?
Warranty expense for November
Warranty expense for December
Cost of replacing items in December
Liability balance

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