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ransaction 4 : As mentioned earlier, the Large Mart store is closed for the month of June. As a result, the manager of the accounting
ransaction :
As mentioned earlier, the Large Mart store is closed for the month of June. As a result, the manager
of the accounting department has decided that warranty provisions for all items sold during the year
will be calculated and recorded now on the June X because it is clear that there will be no
further sales before the end of the financial year which is the June X
Large Mart determines its annual additions to the provisions for warranty account based on past
experience. Using information from earlier years, the manager of the accounting department has
calculated that Large Mart will have approximately $ of warranty costs for each dollar of sales.
Required:
Determine the amount of warranty provisions that Large Mart must recognise in its financial
statements for all sales made during the financial year
Provide all journal entries that are necessary to record the warranty provision for the year
remember that on the June X we already know that there will not be any additional
sales transactions before the end of the financial year
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