[The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $135 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. Exercise 9-12 (Algo) Warranty expense and liability computations and entries LO P4 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?

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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Req 1 to 3
Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on Decem
and (c) the repairs that occur on January 5 of Year 2.
Req 4
View transaction list
Journal entry worksheet
1
2
Date
August 16
Record the sale of a copier for $9,000 cash.
3 4
Note: Enter debits before credits.
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Req 1 to 3 Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on Decem and (c) the repairs that occur on January 5 of Year 2. Req 4 View transaction list Journal entry worksheet 1 2 Date August 16 Record the sale of a copier for $9,000 cash. 3 4 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general journal
[The following information applies to the questions displayed below.]
Hitzu Company sold a copier (that costs $4,500) for $9,000 cash with a two-year parts
warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3% of dollar
sales. It records warranty expense with an adjusting entry on December 31. On January 5 of
Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost
$135 for materials taken from the parts inventory. These are the only repairs required in Year 2
for this copier.
Exercise 9-12 (Algo) Warranty expense and liability computations and entries LO P4
1. How much warranty expense does the company report for this copier in Year 1?
2. How much is the estimated warranty liability for this copier as of December 31 of Year 1?
3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?
4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on
December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2.
Complete this question by entering your answers in the tabs below.
Req 1 to 3
Req 4
1. How much warranty expense does the company report for this copier in Year 1?
2. How much is the estimated warranty liability for this copier as of December 31 of Year 1?
3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?
1. Warranty expense
2. Estimated warranty liability as of December 31 of Year 1
3. Estimated warranty liability as of December 31 of Year 2
Transcribed Image Text:[The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $135 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. Exercise 9-12 (Algo) Warranty expense and liability computations and entries LO P4 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 1. Warranty expense 2. Estimated warranty liability as of December 31 of Year 1 3. Estimated warranty liability as of December 31 of Year 2
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