Tavares Flyer Co. sells remote control airplane engines, which carry a one-year warranty. If a customer...

Transcribed Image Text:

Tavares Flyer Co. sells remote control airplane engines, which carry a one-year warranty. If a customer brings in a defective engine, he replaces the engine with a new one from his inventory. Tavares estimates that 3% of units sold will be defective. As at January 1, the Warranty Liability had a credit balance of $660. Wildhorse provided the following information for his year end of December 31. Cost per engine Total sales Actual warranty costs $125 1,280 units $4,575 Required: a) Calculate the estimated warranty expense for the year. b) Prepare the journal entry for the estimated warranty expense for the year. c) Prepare the journal entry to record the actual warranty costs for the year. d) Calculate the balance in the warranty liability account at the end of the year. PART B - Journal Entry Part B Date Description PART C - Journal Entry Date PART D - Calculate Description Debit Debit Credit Credit Tavares Flyer Co. sells remote control airplane engines, which carry a one-year warranty. If a customer brings in a defective engine, he replaces the engine with a new one from his inventory. Tavares estimates that 3% of units sold will be defective. As at January 1, the Warranty Liability had a credit balance of $660. Wildhorse provided the following information for his year end of December 31. Cost per engine Total sales Actual warranty costs $125 1,280 units $4,575 Required: a) Calculate the estimated warranty expense for the year. b) Prepare the journal entry for the estimated warranty expense for the year. c) Prepare the journal entry to record the actual warranty costs for the year. d) Calculate the balance in the warranty liability account at the end of the year. PART B - Journal Entry Part B Date Description PART C - Journal Entry Date PART D - Calculate Description Debit Debit Credit Credit

Answer rating: 100% (QA)

a Calculate the estimated warranty expense for the year The estimated warranty expense is 3 of the t... View the full answer