Ask Question
BusinessBusiness
6 November, 00:27

Brief Exercise 13-14 Coronado Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Coronado sold 20,000 warranty contracts at $105 each. The corporation spent $189,000 servicing warranties during 2020, and it estimates that an additional $945,000 will be spent in the future to service the warranties.

a. Prepare Leppard's journal entries for the sale of contracts. Assume the service costs are inventory costs.

b. Prepare Leppard's journal entries for the cost of servicing the warranties. Assume the service costs are inventory costs.

c. Prepare Leppard's journal entries for the recognition of warranty revenue. Assume the service costs are inventory costs.

+4
Answers (1)
  1. 6 November, 02:50
    0
    (a) Sale contracts

    Dr Cash $2,100,000

    Cr Unearned warranty revenue $2,100,000

    b) Cost of servicing warranty

    Dr Warranty expense $189,0000

    Cr Inventory $189,000

    (c) Recognized warranty revenue

    Unearned warranty revenue $525,000

    Explanation:

    (a) Sale contracts

    Dr Cash ($20,000 x105) $2,100,000

    Cr Unearned warranty revenue $2,100,000

    b) Cost of servicing warranty

    Dr Warranty expense $189,0000

    Cr Inventory $189,000

    (c) Recognized warranty revenue

    Unearned warranty revenue $525,000

    ($2,100,000 * 1/4)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Brief Exercise 13-14 Coronado Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
For an output level below qe, the value of a unit to a buyer is the cost of a unit to a seller. suppose a firm that produces for this market is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the
Answers (1)
You plan to borrow $47,400 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2
Answers (1)
If a price floor is above market price how does it affect supply and demand?
Answers (1)
Drag the tiles to the correct understand the different types of life insurances plan that earns tax-deferred interest income and has high risk plan that builds wealth and pays a death benefit plan that covers a family while the person is employed
Answers (2)
Both buyers and sellers are price takers in a perfectly competitive market because
Answers (1)
New Questions in Business
What is the current u. s. population? what is the current world population? considering those numbers, do you think the united states is in a population crisis? do we have enough land and resources to support a continuous increase in population?
Answers (1)
Distinguish between individual and market demand for a commodity
Answers (1)
What type of driver's license is class A
Answers (2)
Amalgamation can be expressed as A+B+C=A True Or False ?
Answers (2)
List and explain the four factors of production, stating their reward.
Answers (1)
Home » Business » Brief Exercise 13-14 Coronado Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Coronado sold 20,000 warranty contracts at $105 each.
Sign Up Forgot Password?