QUESTION 1: WARRANTIES (10 marks) G H 2 3 4 Powerful Blenders Ltd. is a manufacturer and dealer of Ngh quality blenders. Each blender comes with a standard two-year warranty against any hardware repaits. Powerful Blenders has a December year-end. Assume all sales of blenders occurred on February 1, 2020 and no other sales of blenders occurred during the yeat Additional data relating to the warranty contracts follows 2 of blonders sold on February 1, 2020 in cash 1,000 Salet price per blender $ 700 9 Inventory.cost of blender $ 200 10 11 Total estimated costs servicing warranties per blenders 150 12 13 Total repair costs incurred in 2020 for blenders under warranty 4 Labour $ 82,000 15 Parts $ 100,000 16 (1) Prepare ALL appropriate oumal entries relating to the product sale and warranty contracts for 2020. Use the drop-down boxes for account names. Use the entry description to help record the appropriate entry. If no entry is needed select N/A from the first line All joumal entries must 10 have debits listed before credits 9 Date Account Title Debit Credit Active Go to s (1). Prepare ALL appropriate journal entries relating to the product sale and warranty contracts for 2020. Use the drop down boxes for account names. Use the entry description to help record the appropriate entry. If no entry is needed, select N/A from the first line. All oumalentines must have debits listed before credits Date Account Title Debit Credit Feb. 1/20 Sale of blanders Feb. 1/20 Cost of Blenders Feb. 1/20 Warranty 5 Dec. 31/20 Repair costs incurred 1 2 3 Acti GO TO (2). What is the appropriateliability account and related dollar amount to be presented on Powerful Blenders Ltd. December 31, 2020 balance sheet? Use the drop-down boxes to select the appropriate account name and classification Classification Account Name Amount (5) (9) What amount of warranty revenue would Powerful Blenders' report on its December 31, 2020 income statement associated with the warranty contracts? Put your dollar amount in the blue box below. 1 Amount (5) 2 3 4 (4) Now assume Powerful Blenders Ltd, provided the two-year warranty as a separate service at an extra selling price of $300 per warranty contract. Assume only 720 separate Warranty contracts were sold. All other information remains the same from above What amount of warranty -5 expense would appear on the income statement for the year ending December 31, 2020? Account.name Amount ($) 27 Warranty expanse Activato Windo GO 14). Now assume Powerful Blenders Ltd provided the two-year warranty as a separate service an extra selling price of $300 per warranty contract. Assume only 720 separate warranty contracts were sold. All other information remains the same from above. What amount of warranty expense would appear on the income statement for the year ending December 31, 20207 Account Name Amount (5) Warranty expense END OF QUESTION 1
