Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hitzu Co. sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Hitzu Co. sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? Warranty expense 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? Estimated warranty liability 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? Estimated warranty liability 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. View transaction list Journal entry worksheet Record the sale of a copier for $6,000 cash. Note: Enter debits before credits. Date General Journal Debit Credit Aug 16 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. View transaction list Journal entry worksheet Record the cost of goods sold of $4,800. Note: Enter debits before credits. Date General Journal Debit Credit Aug 16 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 Year 2. View transaction list Journal entry worksheet Record the estimated warranty expense at 4% of the sales. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. View transaction list Journal entry worksheet On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. Record the cost of the repair. Note: Enter debits before credits. Date General Journal Debit Credit Jan 05

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Business Continuity Global Best Practices

Authors: Rolf Von Roessing

1st Edition

1931332150, 978-1931332156

More Books

Students also viewed these Accounting questions