1. Required Journal Entry:

Record the sales (Assume credit sales).

Record the set up estimated warranty provision.

Record the costs incurred.

Record the reduce warranty provision to new estimate.

Record the costs incurred.

Record the unused warranty provision.2. Requied Journal Entry:

Record the sale, with deferral for warranty (Assume credit sales).

Record the costs incurred.

Record the amortization of deferred revenue.

Record the costs incurred.

Record the amortization of deferred revenue.

On 30 April 20X2, Neuman Ltd. sells a product to a customer for $600,000. The product carries a one-year assurance warranty. Neuman management estimates that the probable cost of fulfilling the warranty will be $50,000. Between 1 May and 31 December 20X2, the actual warranty cost was $20,000. On 31 December 20X2, management decides that the probable additional warranty cost will be no more than $13,000. Between 1 January and 30 April 20X3, the additional cost was $11,000. Required: 1. Prepare the entries concerning the sale and the warranty for 30 April 20x2 through 30 April 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 Record the sales (Assume credit sales). Note: Enter debits before credits. 2. Assume instead that the warranty now includes service and is sold separately with a stand-alone value of $75,000. The product has a stand-alone value of $580,000 and the total contract is $600,000. Prepare the relevant journal entries for 30 April 20X2 through 30 April 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations to one decimal place.) View transaction list Journal entry worksheet