Zebra Corp. commenced operations on January 1, 2019. It estimates warranty expense as 1% of yearly sales. During June 2019 it satisfied warranty claims as follows: Parts from inventory $2,000 Salaries paid in cash 500 The 2019 warranty claims amounted to $22,000 (including the entry above) and 2019 sales revenue was $2 million. Required: Record the June warranty claims of $2,500. Record the 2019 warranty expense. Calculate the balance in the estimated warranty liability account at December 31, 2019. Comment on your calculations. Descriptions and general ledger account numbers are not necessary. Show calculations where applicable.
Zebra Corp. commenced operations on January 1, 2019. It estimates warranty expense as 1% of yearly sales. During June 2019 it satisfied warranty claims as follows: Parts from inventory $2,000 Salaries paid in cash 500 The 2019 warranty claims amounted to $22,000 (including the entry above) and 2019 sales revenue was $2 million. Required: Record the June warranty claims of $2,500. Record the 2019 warranty expense. Calculate the balance in the estimated warranty liability account at December 31, 2019. Comment on your calculations. Descriptions and general ledger account numbers are not necessary. Show calculations where applicable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chapter Comprehensive CP 9‐7
Zebra Corp. commenced operations on January 1, 2019. It estimates warranty expense as 1% of yearly sales. During June 2019 it satisfied warranty claims as follows:
Parts from inventory $2,000 Salaries paid in cash 500
The 2019 warranty claims amounted to $22,000 (including the entry above) and 2019 sales revenue was $2 million.
Required:
- Record the June warranty claims of $2,500.
- Record the 2019 warranty expense.
- Calculate the balance in the estimated warranty liability account at December 31, 2019. Comment on your calculations.
Descriptions and general ledger account numbers are not necessary.
Show calculations where applicable.
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