ACCT $215-$ Intermediate Financial Accounting $1$

Assignment #$2$

Chapter $6$

Name:

$1.$

$4$ marks

Number of HVAC systems sold by PrimeAir during the $2023$ year

$109$

Sales price of an HVAC system

$ $15,773$

Cost of an HVAC system

$ $6,309$

Number of extended warranties sold by PrimeAir during $2023$

$44$

$3,470$$

$1,577$$

$1\%$

Required:

Prepare the journal entries to record the sale of the HVAC systems and the related warranties for the $2023$ year.

Estimated percentage of units sold that will be repaired under original warranty

PrimeAir Technologies sells heating, ventilation and air conditioning $($HVAC$)$ systems to a variety of Canadian businesses. Each HVAC system is sold with a warranty that the product is free from any defects. This warranty remains in effect for one year following the sale of the HVAC system. In addition, PrimeAir sells optional extended warranties on the HVAC systems that last for three years following the expiration date of the original warranty term. Other information pertaining to the sale of the HVAC systems follows:

Sales price of an extended warranty

PrimeAir Technologies makes all sales on account.

Estimated cost of HVAC system repairs under original one$-$year warranty $($per unit repaired$)$