The Computer Company sells laptops that come with a warranty. The total sales in 2020 amount...

 

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The Computer Company sells laptops that come with a warranty. The total sales in 2020 amount to $2,200,000 on credit. The estimated cost of the warranty included in the selling price of the appliances is 2% of sales in 2021 and 4% in 2022. Actual warranty costs related to products sold in previous year amounts to $60,000 in 2020. The company also sells extended coverage plans under which it will repair or replace any defective parts for up to 3 years after the cessation of the assurance warranty. In 2020, total extended warranty sales amounted to $160,000 in cash. The actual costs related to extended warranties in 2020 were $80,000. Required: Record all journal entries related to the assurance warranty in 2020. Assuming beginning warranty liability was $130,000, calculate the ending warranty liability in 2020. Assume the Unearned Warranty Revenues account had a beginning balance of $95,000 in 2020, and the Computer Company estimates that it earned 60% of the total unearned warranty sales recorded by the end of 2020. Record all journal entries related to the extended warranties and calculate the ending balance in the Unearned Warranty Revenues account in 2020. a) b) c) The Computer Company sells laptops that come with a warranty. The total sales in 2020 amount to $2,200,000 on credit. The estimated cost of the warranty included in the selling price of the appliances is 2% of sales in 2021 and 4% in 2022. Actual warranty costs related to products sold in previous year amounts to $60,000 in 2020. The company also sells extended coverage plans under which it will repair or replace any defective parts for up to 3 years after the cessation of the assurance warranty. In 2020, total extended warranty sales amounted to $160,000 in cash. The actual costs related to extended warranties in 2020 were $80,000. Required: Record all journal entries related to the assurance warranty in 2020. Assuming beginning warranty liability was $130,000, calculate the ending warranty liability in 2020. Assume the Unearned Warranty Revenues account had a beginning balance of $95,000 in 2020, and the Computer Company estimates that it earned 60% of the total unearned warranty sales recorded by the end of 2020. Record all journal entries related to the extended warranties and calculate the ending balance in the Unearned Warranty Revenues account in 2020. a) b) c)