Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wildhorse Hardware takes pride as the shop around the corner that can compete with the big-box home improvement stores by providing good service from knowledgeable

image text in transcribed
Wildhorse Hardware takes pride as the "shop around the corner" that can compete with the big-box home improvement stores by providing good service from knowledgeable sales associates (many of whom are retired local handymen). Wiidhorse has developed the following two revenue arrangements to enhance its relationships with customers and increase its bottom line. 1. Wilchorse sells a specialty portable winch that is popular with many of the local customers for use at their lake homes (putting docks in and out, launching boats, etc). The Wildhorse winch is a standard manufacture winch that Wildhorse modifies so the winch can be used for a variety of tasks. Wildhorse sold 80 of these winches during 2025 at a total price of $23,200, with a warranty guarantee that the product was free of any defects. The cost of winches sold is $17,200. The assurance warranties extend for a 3 -year period with an estimated cost of $2.400. In addition, Wildhorse sold extended warranties related to 20 Wildhorse winches for 2 years beyond the 3 -year period for $390 each. 2. To bolster its already strong customer base, Wildhorse implemented a customer loyalty program that rewards a customer with 1 loyalty point for every $10 of purchases on a select group of Wildhorse products. Each point is redeemable for a $1 discount on ary purchases of Wildhorse merchandise in the following 2 years. During 2025, customers purchased select group products for $92,000 (all products are sold to provide a 45% gross profit) and earned 9,200 points redeemable for future purchases. The standalone selling price of the purchased products is $92,000. Based on prior experience with incentives programs like this. Wildhorse expects 8,700 points to be redeemed related to these sales (Wildhorse aporopriately uses this experience to estimate the value of future consideration related to bonus points). (b) Prepare the journal entries for Wildhorse related to the sales of Wildhorse winches with warranties. (Credit account titles are automatically inderted when the amount is entered. Do not indent manually, If no entry is required, select 'No entry' for the account tities and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, eg. 5,125. List all debit entries before credit entries.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Sector Accounting And Finance

Authors: Prof Stephen Sunday Sharang Ph.D.

1st Edition

979-8639273353

More Books

Students also viewed these Accounting questions

Question

10. What is meant by a feed rate?

Answered: 1 week ago

Question

here) and other areas you consider relevant.

Answered: 1 week ago