Question
On August 1, 2019, Pereira Corporation has sold 1,700 Wiglows to Mendez Company at $480 each. Mendez also purchased a 1-year service-type warranty on all
On August 1, 2019, Pereira Corporation has sold 1,700 Wiglows to Mendez Company at $480 each. Mendez also purchased a 1-year service-type warranty on all the Wiglows for $12 per unit. In 2019, Pereira incurred warranty costs of $9,000. Costs for 2020 were $8,400.
Required:
1. | Prepare the journal entries for the preceding transactions. |
2. | Show how Pereira would report the items on the December 31, 2019, balance sheet. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pereira Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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1. Prepare the necessary journal entries to record:
1. The sale of Wiglows and service warranty on account on August 1, 2019 | |
2. The warranty costs paid during 2019 | |
3. The warranty revenue earned in 2019 | |
4. The warranty costs paid during 2020 | |
5. The warranty revenue earned in 2020 |
General Journal Instructions
PAGE 1
GENERAL JOURNAL
DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
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2. Show how Pereira would report the items on the December 31, 2019, balance sheet.
Balance Sheet Instruction
PEREIRA CORPORATION |
Partial Balance Statement |
December 31, 2019 |
1 | Current Liabilities: |
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