1 Warranties Practice Exercise 2 3 Requirement 1: Complete necessary entries for each of the below transactions 4 Untrix, Inc. sold 300 High Quality DVD players in the amount of $275 each during 2020 (for cash). The DVD's have a cost basis of $215 to the company. Untrix offers a free 2 year warranty on all DVD players. Historically, they have experienced an average warranty cost of 2% of the 5 sales price. Jonesy uses the perpetual inventory method. They started the period with a $0 balance in estimated warranty liability. 6 Record the sale of the 150 DVD players (this portion goes back to our earlier Inventory discussion topics.) The practice exercise YouTube video 7 will also help you out here.) 8 A.) 9 10 11 12 13 Record the Warranty Expense Adjusting Entry at the end of 2020. 14 B) 15 16 During 2021, 10 of the DVD players are returned due to a severe malfunction and had to 17 replaced with an entirely new unit out of inventory. Record this entry. 18 C) 19 20 21 D. What is the total warranty expense that would have been recorded for 2020? 22 23 E. What is the total warranty liability at the end of 2020? 24 F. What is the total warranty expense that would have been recorded for 2021, assuming 25 no other sales have taken place, other than the ones noted in the problem? 26 27 G. What is the total warranty liability at the end of 2021? 28 H. Comment on the company's estimated warranty percentage. Is it suffident? Would you 29 recommend they increase or decrease it? 30 31 32 33