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Problem 137 Sunland Company sells a machine for $7,080 with a 12-month warranty agreement that requires the company to replace all defective parts and to
Problem 137 Sunland Company sells a machine for $7,080 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 580 machines in 2017 (warranty expense is incurred half in 2017 and half in 2018). As a result of product testing, the company estimates that the warranty cost is $430 per machine (5190 parts and $240 labor). Use "Inventory account to record the warranty expense. Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts? El your answer is partially correct. Try again. Sale of machinery and warranty expense incurred in 2017. (If no untry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not Indent manually.) Account Titles and explanation Debit Credit I canh 4106400 Sales Revenue 4105400 To record sale) Warranty Liability 124700 Inventory 55100 69600 Salaries and Wages Payable (To record warranty expense) Your answer is partially correct. Try again. Warranty accrual on December 31, 2017. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Warranty expensie 249.400 Warranty Liability 249400 Your answer is correct. Warranty costs incurred in 2018. (If no entry is required, select "No Entry for the account titles and enter for the amounts, Credit account titles are automatically indented when amount is entered. Do not indent manually. Debit Credit Account Titles and Explanation 124700 Warranty Liability 55100 Inventory 69600 Salaries and Wages Payable SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is correct. What amount, if any, is disclosed in the balance sheet as a liability for future warranty costs as of December 31 2017? 124200 Warranty liability Click if you would like to show Work for this question: Open Show Work SHOW SOLUTION SHOW LIST OF ACCOUNTS LINK TO TEXT SAVE FOR LATER Question Attempts: 1 of 4 used
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