Trekster guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 4% of sales. Assume that the Trekster dealer in Colorado Springs made sales totaling S550,000 during 2018. The company received cash for 40% of the sales and notes receivable for the remainder. Warranty payments totaled S12,000 during 2018. Read the requirements. ... Requirement 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin with the entry to record the sales. (Prepare a single compound entry for this transaction.) Date Accounts and Explanation Debit Credit 2018 Record the warranty expense. Date Accounts and Explanation Debit Credit 2018

Trekster guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 4% of sales. Assume that the Trekster dealer in Colorado Springs made sales totaling S550,000 during 2018. The company received cash for 40% of the sales and notes receivable for the remainder. Warranty payments totaled S12,000 during 2018. Read the requirements. ... Requirement 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin with the entry to record the sales. (Prepare a single compound entry for this transaction.) Date Accounts and Explanation Debit Credit 2018 Record the warranty expense. Date Accounts and Explanation Debit Credit 2018

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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Product A comes with a two year warranty when purchased by customers. The estimated warranty costs as a percentage of dollar sales are 3% in the year of sale and 5% in the second year after the sale. The following information relates to sales and warranty expenditures of Product A Actual warranty expenditures $ 10,000 $ 35,000 Year Year 1 Year 2 Sales $400,000 $500,000 Which of the following is NOT part of the required journal entry in Year 1 based on the above information? Multiple Choice Credit cash $10,000 Debit warranty expense $12,000 None of the other alternatives are correct Debit warranty expense $32,000 Credit sales $400,000
The following selected transactions relate to liabilities of Colorado Adventures. Colorado's fiscal year ends on December 31. January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate. February 1 Arrange a three-month bank loan of $3.8 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity. May 1 Pay the 7% note at maturity. Required: Record the appropriate entries, if any, on January 13, February 1, and May 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 million should be entered as 5,000,000).)
EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all scooters. During the year, the company recorded net sales of $2,850 million. Historically, about 4% of all sales are returned under warranty and the cost of repairing and or replacing goods under warranty is about 30% of retail value. Assume that at the start of the year EZ Wheels’ balance sheet included an accrued warranty liability of $24.5 million and at the end of the year, the accrued warranty liability balance was $18.6 million. How much did EZ Wheels pay during the year to repair and/or replace scooters under warranty? Select one: a. None of these are correct. b. $40.1 million c. $34.2 million d. $114.0 million e. $18.6 million
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