Question

Super Sale Company sold 300 washing machines on April 10th , 2015, for $4,000 a piece, together with a 1-year warranty. Maintenance on each washing machine during the warranty period is estimated to be $170. Actual warranty costs (inventory) incurred in 2015 were $9,000.

Required:

Prepare entries to record the following:

a) Sale of the washing machines.

b) Related warranty costs.

c) The accrual on December 31, 2015.