Part 1: Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks. It was disclosed in notes to the company's financial statements that estimated warranty costs are accrued at the time products are sold. Assume that in 2023 warranty costs are estimated at $319,000 and that the related warranty work was actually paid for during 2024. Required: Prepare journal entry to show the effect on financial statements due to warranties in 2023 and 2024. No 1 2 Date December 31, 202 December 31, 202 General Journal Warranty expense Estimated warranty liability Estimated warranty liability Cash or Merchandise inventory Debit 319,000 319,000 Credit 319,000 319,000
Part 1: Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks. It was disclosed in notes to the company's financial statements that estimated warranty costs are accrued at the time products are sold. Assume that in 2023 warranty costs are estimated at $319,000 and that the related warranty work was actually paid for during 2024. Required: Prepare journal entry to show the effect on financial statements due to warranties in 2023 and 2024. No 1 2 Date December 31, 202 December 31, 202 General Journal Warranty expense Estimated warranty liability Estimated warranty liability Cash or Merchandise inventory Debit 319,000 319,000 Credit 319,000 319,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Part 1:
Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks.
It was disclosed in notes to the company's financial statements that estimated warranty costs are accrued at the time products are
sold. Assume that in 2023 warranty costs are estimated at $319,000 and that the related warranty work was actually paid for during
2024.
Required:
Prepare journal entry to show the effect on financial statements due to warranties in 2023 and 2024.
No
1
2
Date
December 31, 202
December 31, 202
General Journal
Warranty expense
Estimated warranty liability
Estimated warranty liability
Cash or Merchandise inventory
Debit
319,000
319,000
Credit
319,000
319,000
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