Answered: Prepare all appropriate journal entries…

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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Question

On January 1, 2020, Sheridan Ltd. sold on account 800 units of its product for a total price of $575,000 and a cost of $493,000. The products have a one-year assurance-type warranty and Sheridan estimates that the cost will be $23,000. By the company’s year-end December 31, 2020, actual warranty costs related to the products sold was $18,500, paid in cash.

Prepare all appropriate journal entries including the sale of merchandise. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
January 1/20



	(To record the sale)
January 1/20December 31/20

	(To record the cost of goods sold)
January 1/20December 31/20


	(To record warranty costs)

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