Problem 156 Merritt Equipment Company sells computers for $1,760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 860 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2017.) In 2018, Merritt incurred actual warranty costs relative to 2017 computer sales of $10,800 for parts and $16,200 for labor. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2017 and 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2017 (To record sale of computers) 2017 (To record liability against warranty costs) 2018 The transactions of part (a) create what balance under current liabilities in the 2017 balance sheet?

Problem 156 Merritt Equipment Company sells computers for $1,760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 860 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2017.) In 2018, Merritt incurred actual warranty costs relative to 2017 computer sales of $10,800 for parts and $16,200 for labor. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2017 and 2018. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation 2017 (To record sale of computers) 2017 (To record liability against warranty costs) 2018 The transactions of part (a) create what balance under current liabilities in the 2017 balance sheet? Current Liabilities- Click if you would like to Show Work for this question: Open Show Work