On November 10, 2013, Lee Co. began operations by purchasing coffee grinders for resale. Lee uses the
Question:
2013
Nov. 16 Sold 50 grinders for $ 2,500 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
Dec. 12 Replaced six grinders that were returned under the warranty.
18 Sold 200 grinders for $ 10,000 cash.
28 Replaced 17 grinders that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
2014
Jan. 7 Sold 40 grinders for $ 2,000 cash.
21 Replaced 36 grinders that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Required
1. Prepare journal entries to record these transactions and adjustments for 2013 and 2014.
2. How much warranty expense is reported for November 2013 and for December 2013? 3. How much warranty expense is reported for January 2014?
4. What is the balance of the Estimated Warranty Liability account as of December 31, 2013?
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2014?
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Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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