Tripp Go-Karts sells motorized go-karts. Tripp Go-Karts are motorized and are typically purchased by amusement parks and other recreation facilities, but are also occasionally purchased by individuals for their own personal use. The company uses a perpetual inventory system. Selected transactions in the month of December follow (Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare the joumal entries to record the transactions shown. Omit explanations. (Record debits first, then credits. Explanations are not required. For situations that do not require an entry, make sure to select "No entry required in the first cell in the 'Accounts column and leave all other cells blank.) Dec 1: Tripp sold 12 go-karts on account. The selling price of each go-kart was $1,700; the cost of goods sold for each was $500. Do not record the cost related to the sale. We will do this in the next jounal entry. Journal Entry Debit Credit Date Accounts Dec 1 ID Now record the cost related to the sale above. Journal Entry Date Accounts Debit Credit Dec 1 Dec 5: Tripp recelved notice of a class-action lawsuit being filed against it. The lawsuit claims that Tripp's go-karts have engine defects that appear after the warranty period expires. The plaintiffs want Tripp to replace the defective engines and pay damages for the owners loss of use. The cost of replacing the engines would be approximately $375,000 (not including any damages). Tripp's attorney believes that it is reasonably possible that Tripp will lose the case, but the attomey cannot provide a dollar estimate of the potential loss amount Journal Entry Date Debit Credit Dec 5 Dec 20:Tripp performed repairs due to product warranty complaints for two go-karts sold earlier in the year. Tripp's cost of the repairs, paid in cash, was $700 Journal Entry Credit Date Debit Dec 20 Dec 22: An individual claims that he suffered emotional distress from a high-speed ride on a Tripp Go-Kart and is seeking $450,000 in damages. Tripp's attorney believes the case is frivolous because it does not have any legal merit. Journal Entry Date Debit Credit Dec 22 Dec 27: Another customer is suing Tripp for $240,000 because a defect in the customers Tripp Go-Kart engine started a fire and destroyed the customer's garage. Tripp's attorney believes the customer will probably win the case and receive $240,000. (Use the following account names: Loss from Lawsuit and Accrued Liability from Lawsuit.) Journal Entry Date Debit Credit Dec 27 Dec 31: Tripp estimates that the warranty expense is 10% of gross sales. Tripp's gross sales for the period totaled $770,000. Journal Entry Debit Date Credit Dec 31 Tripp Go-Karts sells motorized go-karts. Tripp Go-Karts are motorized and are typically purchased by amusement parks and other recreation facilities, but are also occasionally purchased by individuals for their own personal use. The company uses a perpetual inventory system. Selected transactions in the month of December follow (Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare the joumal entries to record the transactions shown. Omit explanations. (Record debits first, then credits. Explanations are not required. For situations that do not require an entry, make sure to select "No entry required in the first cell in the 'Accounts column and leave all other cells blank.) Dec 1: Tripp sold 12 go-karts on account. The selling price of each go-kart was $1,700; the cost of goods sold for each was $500. Do not record the cost related to the sale. We will do this in the next jounal entry. Journal Entry Debit Credit Date Accounts Dec 1 ID Now record the cost related to the sale above. Journal Entry Date Accounts Debit Credit Dec 1 Dec 5: Tripp recelved notice of a class-action lawsuit being filed against it. The lawsuit claims that Tripp's go-karts have engine defects that appear after the warranty period expires. The plaintiffs want Tripp to replace the defective engines and pay damages for the owners loss of use. The cost of replacing the engines would be approximately $375,000 (not including any damages). Tripp's attorney believes that it is reasonably possible that Tripp will lose the case, but the attomey cannot provide a dollar estimate of the potential loss amount Journal Entry Date Debit Credit Dec 5 Dec 20:Tripp performed repairs due to product warranty complaints for two go-karts sold earlier in the year. Tripp's cost of the repairs, paid in cash, was $700 Journal Entry Credit Date Debit Dec 20 Dec 22: An individual claims that he suffered emotional distress from a high-speed ride on a Tripp Go-Kart and is seeking $450,000 in damages. Tripp's attorney believes the case is frivolous because it does not have any legal merit. Journal Entry Date Debit Credit Dec 22 Dec 27: Another customer is suing Tripp for $240,000 because a defect in the customers Tripp Go-Kart engine started a fire and destroyed the customer's garage. Tripp's attorney believes the customer will probably win the case and receive $240,000. (Use the following account names: Loss from Lawsuit and Accrued Liability from Lawsuit.) Journal Entry Date Debit Credit Dec 27 Dec 31: Tripp estimates that the warranty expense is 10% of gross sales. Tripp's gross sales for the period totaled $770,000. Journal Entry Debit Date Credit Dec 31
