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

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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