Required: 1.  Prepare the adjustment to correct the estimated warranty liability on December 31, 2022.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Required:
1.  Prepare the adjustment to correct the estimated warranty liability on December 31, 2022.

In 2021, Beginner Pottery Company began selling a new calculator that carried a two-year warranty against defects.
Beginner Pottery projected the estimated warranty cost (as a percent of sales) as follows:
First year of warranty
Second year of warranty
4%
10%
Sales and actual warranty repairs were:
2022
9,000,000
560,000
2021
Sales
5,000,000
200,000
Actual warranty repairs
Transcribed Image Text:In 2021, Beginner Pottery Company began selling a new calculator that carried a two-year warranty against defects. Beginner Pottery projected the estimated warranty cost (as a percent of sales) as follows: First year of warranty Second year of warranty 4% 10% Sales and actual warranty repairs were: 2022 9,000,000 560,000 2021 Sales 5,000,000 200,000 Actual warranty repairs
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education