Harper Corp. manufactures and sells travel clocks. Each clock costs $12.50 to produce and sells for $25.

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Harper Corp. manufactures and sells travel clocks. Each clock costs $12.50 to produce and sells for $25. In addition, each clock carries a warranty that provides for free replacement if it fails during the two years following the sale. In the past, 5 percent of the clocks sold have had to be replaced under the warranty. During October, Harper sold 52,000 clocks, and 2,800 clocks were replaced under the warranty. Prepare entries in journal form to record the estimated liability for product warranties during the month and the clocks replaced under warranty during the month.


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Principles Of Financial Accounting

ISBN: 9780538755160

11th Edition

Authors: Belverd E Needles, Marian Powers

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