QUESTION 5

Question #4 (6%Points) The Whirl Company sells washing machines with a 1-year warranty (Duly 1, 2017- July 1, 2018) past, the company estimates that in the first year of the sale, warranty costs will be machine. Each washing machine is sold for $400. machines in 2017 and warranty costs relating to its 2017 sales were as follows: . In the $40 per washing Assume that the company sold 4,000 washing Year Warranty Expenditures 2017 $140,000 2018 $190,000 Required: Assuming the warranty is an assurance-type, prepare all necessary journal entries for 2017 and 2018 (1 Point) a) Sale of the washing machines for cash on July 1, 2017 b) The payment or incurrence of the warranty cost c) The amount of any additional warranty expense to be s to be recorded on December 31, 2018, (1% Points) recorded on December 31, 2018. (1 1/2 Points) t and the incurrence of any additional warranty costs to be recorded orn (2 1/2 Points) July 1, 2018. 1 6% Points) Question #5 Assume that the $400 selling price that the Whirl Company sells its washing machines included the cost of the 1-year warranty of $40 per unit. Required: Assuming the warranty is a service-type, prepare all necessary journal entries for 2017 and 2018. a) Sale of the washing machines for cash on July 1, 2017 b) The payment or incurrence of the warranty costs to be recorded on December 31, 2017, (1% Points) c) The amount of warranty revenue to be recorded on December 31, 2017 d) The payment or incurrence of the warranty costs and any associated warranty revenue to be (1 Point) (1 1/2 Points) (2 1/2 Points) recorded on July 1, 2018