On December 1, Concord Company introduces a new product that includes a one-year warranty on parts. In December, 1,300 unitsare sold. Management believes that 6% of the units will be defective and that the average warranty costs will be $90 per unit.Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honoredto date. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date Account Titles and ExplanationDebitCreditDec. 31

Solution: Estimated warranty cost = 1300 units * 6% * $90 = 1300*6%*90 = $7020

on December 1, Concord Company introduces a new product that includes a one-year warranty on parts. In December, 1,300 uni re sold. Management believes that 6% of the units will be defective and that the average warranty costs will be $90 per unit.

on December 1, Concord Company introduces a new product that includes a one-year warranty on parts. In December, 1,300 uni re sold. Management believes that 6% of the units will be defective and that the average warranty costs will be $90 per unit.

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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