Subscriptions (Learning Objective 2) 5–10 min.

Ozark Publishing Company completed the following transactions during 2014:

Nov 1 Dec 15 31 Sold 50 six-month subscriptions, collecting cash of $2,400, plus sales tax of 4%.

Remitted the sales tax to the state of Alabama.

Made the necessary adjustment at year-end to record the amount of subscription revenue earned during the year.

Requirements 1. Journalize these transactions. Explanations are not required.

2. What amounts would Ozark Publishing Company report on the balance sheet at December 31, 2014?

E9-30B. Warranties (Learning Objective 3) 5–10 min.

The accounting records of Tim’s Auto Repair showed a balance of $1,600 in Estimated Warranty Payable at December 31, 2013. In the past, Tim’s warranty expense has been 3% of sales. During 2014, Tim’s made sales of $386,000 on account and paid $9,420 to satisfy warranty claims.

Requirements 1. Journalize Tim’s sales, warranty expense, and cash payments made to satisfy warranty claims during 2014. Explanations are not required. Ignore cost of goods sold.

2. What balance of Estimated Warranty Payable will Tim’s report on its balance sheet at December 31, 2014? What amount of warranty expense will Tim’s report on its income statement for the year ended December 31, 2014?

AppendixLO1