Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $330. Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2020. Actual warranty costs (inventory) incurred in 2020 were $17,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Business

Brodie

8 July, 13:48

Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $330. Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2020. Actual warranty costs (inventory) incurred in 2020 were $17,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Pugsley · Answer 1

The journal entries are shown below:

1. Cash A/c Dr $800,000 ($4,000 * 200 color laser copiers)

To Sales revenue A/c $800,000

(Being the sale of the copies are recorded)

2. Warranty expense A/c Dr $17,000

To Inventory A/c $17,000

(Being the warranty expense is recorded)

3. Warranty expense A/c Dr $49,000 (200 * $330 - $17,000)

To Warranty liability A/c $49,000

(Being the accrual warranty is recorded)