Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Superior Skateboard Company, located in Ontario, is preparing adjusting entries at December 31, 2020. An analysis reveals the following: a. During December, Superior sold 6.900
Superior Skateboard Company, located in Ontario, is preparing adjusting entries at December 31, 2020. An analysis reveals the following: a. During December, Superior sold 6.900 skateboards that carry a 60-day warranty. The skateboard sales totalled $394,000. The company expects 5% of the skateboards will need repair under warranty and it estimates that the average repair cost per unit will be $42 b. A disgruntled employee is suing the company, Legal advisers believe that it is probable that Superior will have to pay damages, the amount of which cannot be reasonably estimated c. Superior needs to record previously unrecorded cash sales of $2,140,000 (cost of sales 60%) plus applicable HST. d. Superior recognizes that $99,000 of $164,000 received in advance for skateboards has now been earned. Required: Prepare any required adjusting entries at December 31, 2020, for each of the above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 > Record warranty expense. Note: Enter debits before credits Date Generalloumal Dahil Credit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started