Problem 3 Warranty Expense - Apple sells a laptop (that costs $600) for $ 1,000 cash with a two-year parts warranty to a customer on September 20 of Year 1. Apple expects warranty costs to be 5% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 6 of Year 2, the laptop requires on site repairs that are completed on the same day. The repair costs $47 for materials taken from the Parts Inventory These are the only repairs required in Year 2 for this laptop. 1. How much warranty expense does the company report for this laptop in Year 1? 2. How much is the estimated warranty liability for the laptop as of December 31 of Year 1? 3. How much is the estimated warranty liability for the laptop as of December 31 of Year 2? 4. Prepare journal entries to record (a) the laptop's sale; (b) the adjustment recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 6 of Year 2.

Problem 3 - Warranty Expense - Apple sells a laptop (that costs $600 ) for $1,000 cash with a two-year parts warranty to a customer on September 20 of Year 1. Apple expects warranty costs to be 5% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 6 of Year 2, the laptop requires onsite repairs that are completed on the same day. The repair costs $47 for materials taken from the Parts Inventory. These are the only repairs required in Year 2 for this laptop. 1. How much warranty expense does the company report for this laptop in Year 1 ? 2. How much is the estimated warranty liability for the laptop as of December 31 of Year 1 ? 3. How much is the estimated warranty liability for the laptop as of December 31 of Year 2? 4. Prepare journal entries to record (a) the laptop's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1 ; and (c) the repairs that occur on January 6 of Year 25 Short Answer Question #1 - Why do companies record and show estimated warranty liabillies when they might never have to pay them? Short Answer Question 42 - Which payroll taxes are the employee's responsibility and which payroll taxes are the employer's responsibility? What costs/expenses do you think should be included in the calculation of the total cost of an employee to an organization