Question #1: Limits Incorporated Limits Incorporated [LI] had the following events occur during 2023: On March 1, 2023, LI signed a contract with a customer AIG Limited to manufacture specialized lawn equipment. The contract was signed for $500,000 and AIG paid $150,000 to LI on the date of the signing. Manufacturing and delivery to AIG is expected to begin in October. On On July 2nd, LI sold $200,000 of lawn equipment to PMG for $320,000 cash. The lawn equipment comes with a one-year warranty. Based on history, warranty is expected to average 2% of the selling price of lawn equipment. On November 3rd, LI delivered $75,000 of lawn equipment to AIG. The cost of the equipment manufactured was $38,000. The lawn equipment carries the same warranty as all other lawn equipment. On December 15th some lawn equipment was returned for repair. The parts needed for repair amounted to $1,200, with $200 of labour being utilized to make the repairs. . Required: Prepare journal entries for ALL the events above (all sales, related cost of sales, etc.). Show all work. Assume perpetual inventory and IGNORE sales taxes.

Question #1: Limits Incorporated Limits Incorporated [LI] had the following events occur during 2023: On March 1, 2023, LI signed a contract with a customer AIG Limited to manufacture specialized lawn equipment. The contract was signed for $500,000 and AIG paid $150,000 to LI on the date of the signing. Manufacturing and delivery to AIG is expected to begin in October. On On July 2nd, LI sold $200,000 of lawn equipment to PMG for $320,000 cash. The lawn equipment comes with a one-year warranty. Based on history, warranty is expected to average 2% of the selling price of lawn equipment. On November 3rd, LI delivered $75,000 of lawn equipment to AIG. The cost of the equipment manufactured was $38,000. The lawn equipment carries the same warranty as all other lawn equipment. On December 15th some lawn equipment was returned for repair. The parts needed for repair amounted to $1,200, with $200 of labour being utilized to make the repairs. . Required: Prepare journal entries for ALL the events above (all sales, related cost of sales, etc.). Show all work. Assume perpetual inventory and IGNORE sales taxes.

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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