Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

include calculation pls KRP Machinery Corporation, a private company following ASPE sold manufacturing equipment for $2,500 each. Each machine carried with it a 2-year warranty

image text in transcribed

include calculation pls

KRP Machinery Corporation, a private company following ASPE sold manufacturing equipment for $2,500 each. Each machine carried with it a 2-year warranty against manufacturing defects. From experience, KRP Machinery Corporation determined that each machine sold would average $300 in replacement parts. In 2020, the company sold 1,000 machines. Also in 2020, the company incurred $125,000 in total repair costs (the cost of replacement parts from Inventory). KRP Machinery Corporation also sold an extended warranty for its machines. For $500, customers could purchase an extended warranty that extended the warranty on the machine for an additional 2 years. 800 of the customers that bought machines also purchased the extended warranty. Assume the revenue is earned evenly over the two-year contract. Using the Revenue Approach, prepare the journal entry to record the sale of the machines and extended warranties. Cronore any cost of anode cold entry). (Credit account are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account Utles and entero for the amounts.) Account Titles and Explanation Debit Credit Using the Revenue Approach, prepare the journal entry to record the warranty costs incurred during 2020. (Credle account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Using the Revenue Approach, prepare the journal entry to record the year-end adjusting entries at December 31, 2020, for the assurance-type warranties assuming KRP's year-end is December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Using the Revenue Approach, prepare the journal entry to record the year-end adjusting entries at December 31, 2022 for the service-type warranties. (Note: assume that the cost of repairs has already been recorded during 2022 and prepare any other adjusting entry needed). (Credit account tities are automatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

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 Warehouse Performance

Authors: Kenneth B. Ackerman

1st Edition

0963177680, 978-0963177681

More Books

Students also viewed these Accounting questions

Question

=+50. Now deduce Theorem 3.3 from part (a).

Answered: 1 week ago

Question

What are the objectives of Human resource planning ?

Answered: 1 week ago

Question

Explain the process of Human Resource Planning.

Answered: 1 week ago