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can you solve this question for me and do it as fast you can I need it urgently Addictive Computer Company sells computers for $2,000
can you solve this question for me and do it as fast you can I need it urgently
Addictive Computer Company sells computers for $2,000 each, which includes a 3-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, Addictive sold 500 computers on account. Based on past experience, the company has estimated the total 3-year warranty costs at $ 80 for parts and $ 100 for labour. (Assume sales all occur at December 31, 2020.) In 2021, Addictive Computer Company incurred actual warranty costs relative to 2020 computer sales of $ 10,000 for parts and $ 12,000 for labour. a) Using the expense warranty approach, prepare the entries to reflect the above transactions (accrual method) for 2020 and 2021. (2 marks) b) Using the cash basis method, what are the Warranty Expense balances for 2020 and 2021? (1 mark) c) The transactions of part a) create what balance under current liabilities in the 2020 statement of financial position? (2 marks)Step by Step Solution
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