Question
Merritt Equipment Company sells computers for $1,200 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and
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Date | Account Titles and Explanation | Debit | Credit |
2017 | Warranty Expense Cash, Inventory, Accrued Payroll Accounts Receivable Warranty Liability Sales Revenue Inventory | ||
Accounts Receivable Cash, Inventory, Accrued Payroll Warranty Expense Warranty Liability Sales Revenue Inventory | |||
(To record sale of computers) | |||
2017 | Warranty Expense Cash, Inventory, Accrued Payroll Accounts Receivable Sales Revenue Inventory Warranty Liability | ||
Cash, Inventory, Accrued Payroll Sales Revenue Accounts Receivable Warranty Liability Warranty Expense Inventory | |||
(To record liability against warranty costs) | |||
2018 | Accounts Receivable Inventory Cash, Inventory, Accrued Payroll Sales Revenue Warranty Expense Warranty Liability | ||
Sales Revenue Cash, Inventory, Accrued Payroll Warranty Expense Inventory Accounts Receivable Warranty Liability | |||
Warranty Liability Cash, Inventory, Accrued Payroll Accounts Receivable Inventory Warranty Expense Sales Revenue |
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