Home Insert Formulas REVIEW View Help Open In Desktop App : Calibr Light A v General B D E F SPECIFIC INSTRUCTIONS: Only the BLUE CELLS will be marked. All journal entries must have Debits listed first before Credits. Use the description under the date to help with the ordering of the Journal entries. QUESTION DATA: Barb Inc. sells high-quality industrial style blenders at an average price of $750, which includes a standard one year warranty that covers both parts and labour. The cost of each blender sold is $450. The company also offers each customer a separate two-year extended warranty contract for $120 covering periodic services and to replace defective parts. The extended warranty begins one year after the purchase date. On December 31, 2020, Barb Inc. sold 1,500 blenders and 1,000 extended warranty contracts on account. 20% of Blenders sold are expected to require warranty repairs within the first year. Past experience shows average costs on each blender brought in for warranty repairs in the first year after purchase amount to $225 per blender: $150 for labour and $75 for parts. Barb Inc. estimates the average two-year extended warranty costs as $100 per blender. All warranty costs are expected to be incurred evenly over the warranty period. B REQUIRED: Answer parts (1) and (2) based on the Information above. (1). Prepare the necessary journal entries for 2020 to account for the Blender Sales and all warranty related items noted above.37\\(2). What warranty related liabilities and amounts would appear on Barb Inc.'s Statement of Financial Position at December 38 31, 2020? Please show proper classification. 39 40 Classification Account name on SFP Amount ($) 41 42 43 44 Answer parts (3) and (4) assuming that in 2021, actual costs relative to 2020 blender sales were $41,875 for labour and 45 $20,625 for parts. 46 (3). Prepare the necessary journal entries for 2021 relative to the 2020 blender warranties, 47 Date Account Title Debit Credit 48 49 Dec. 31/21 SO 2021 Actual costs 51 Dec. 31/21 54 Y/E Adj. to Warranty 55 payable (if any) 56 57 58 (4). What warranty related liabilities and amounts would appear on Barb Inc.'s Statement of Financial Position at December 59 31, 20217 Please show proper classification. 60 Classification Account name on SFP Amount ($) GIL 62 63Answer part (5) assuming that in 2022, actual costs relative to the extended warranties sold in 2020 were $30,150 for labour and $14,850 for parts. (5). Prepare the necessary journal entries for 2022 relative to the 2020 blender warranties. Date Account Title Debit Credit Dec. 31/22 2022 Actual costs 72 Dec. 31/22 74 Extended warranty 75
