1.
a.
To prepare: The required journal entries for recording sold wireless router for the current year.
Given information:
Products sold by the company are worth $11,200,000.
Cost of products sold is $5,000,000.
Estimated warranty cost is 4% of the total sales.
Service-type warranties sold 45000 @ $85 per contract.
Customers claimed $286,000 against assurance-type warranty.
Customers claimed $185,000 against service-type warranty.
Company uses perpetual inventory system.
b.
To prepare: The required journal entries for recording accrual for the estimated warranty costs for the current year.
c.
To prepare: The required journal entries for recording actual repairs for the current year.
d.
To prepare: The required journal entries for recording service-type warranty contract sales for the current year.
e.
To prepare: The required journal entries for recording recognition of contract revenue for 3 subsequent years to sale of the service type contracts.
f.
To prepare: The required journal entries for recording actual repairs for the first year under service-type warranty.
2.
The way in which the company classifies the assurance-type warranty and the unearned revenue under the service type warranty contract on the balance sheet at the end of the year of sale.
3.
To prepare: The journal for recording estimated liability under the assurance type of warranty for the next year.
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Chapter 13 Solutions
Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
- accounting question?arrow_forwardThree individuals form JEY Corporation with the following contributions: Joe, cash of $50,000 for 50 shares; Ethan, land worth $20,000 (basis of $11,000) for 20 shares; and Young, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares. a. These transfers are fully taxable and not subject to § 351. b. Young’s basis in her stock is $27,000. c. Young’s basis in her stock is $6,000. d. Ethan’s basis in his stock is $20,000. e. None of the above.arrow_forwardNonearrow_forward
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