Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part 1: Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks. It was disclosed in notes to the companys

Part 1: Okanagan Refrigeration manufactures and markets commercial refrigeration systems for food trucks and specialized transport trucks. It was disclosed in notes to the companys financial statements that estimated warranty costs are accrued at the time products are sold. Assume that in 2020 warranty costs are estimated at $322,000 and that the related warranty work was actually paid for during 2021.

Required: Prepare the journal entry to show the effect on financial statements due to warranties in 2020 and 2021.

Part 2: Assume that Fabfit Enterprises collected $2,020,000 during 2020 for fitness magazines that will be delivered in future years. During 2021, Fabfit delivered magazines based on these subscriptions amounting to $1,905,000.

Required: Prepare journal entry to show the effect on financial statements in 2020 and 2021 by these subscriptions.

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

Performance Auditing Of Public Sector Property Contracts

Authors: Lori Keating

1st Edition

0566089998, 978-0566089992

More Books

Students also viewed these Accounting questions

Question

What is meant by the margin of safety?

Answered: 1 week ago

Question

Explain the steps involved in training programmes.

Answered: 1 week ago

Question

What are the need and importance of training ?

Answered: 1 week ago

Question

1. Which position would you take?

Answered: 1 week ago