Question
Early in 2017, Kingbird Equipment Company sold 600 Rollomatics during 2017 at $5,600 each. During 2017, Kingbird spent $20,000 servicing the 2-year assurance warranties that
Early in 2017, Kingbird Equipment Company sold 600 Rollomatics during 2017 at $5,600 each. During 2017, Kingbird spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
Prepare 2017 entries for Kingbird. Assume that Kingbird estimates the total cost of servicing the warranties will be $58,000 for 2 years
| Date | Account Titles and Explanation | Debit | Credit |
| At SaleDuring 2017Dec. 31, 2017 | |||
| At SaleDuring 2017Dec. 31, 2017 | |||
| At SaleDuring 2017Dec. 31, 2017 | |||
Prepare 2017 entries for Kingbird assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $59,000 relates to sales of warranty contracts. Kingbird estimates the total cost of servicing the warranties will be $58,000 for 2 years
| Date | Account Titles and Explanation | Debit | Credit |
| At SaleDuring 2017Dec. 31, 2017 | |||
| At SaleDuring 2017Dec. 31, 2017 | |||
| At SaleDuring 2017Dec. 31, 2017 | |||
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Information Technology And Insights Audit Controls Bringing A Vision And Understanding To Effective Practices
Authors: R. Allen Conner
1st Edition
1720081883, 978-1720081883
