Adele Associates manufactures and distributes component parts for car audio systems. Adele's assurance-type warranty covers all...

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Adele Associates manufactures and distributes component parts for car audio systems. Adele's assurance-type warranty covers all repair costs, including parts and labor, for 2 years after the date of sale. During the current year, Adele sold $4,200,000 of component parts to several manufacturers of car audio systems. Ignore cost of goods sold. The company estimates that warranty costs will be 10% of sales. Adele did not make any repairs in the year of the sale. However, during the following year, the company incurred $71,000 in warranty claims. The repair costs include $42,000 in parts and $29,000 in labor (unpaid). Adele uses the accrual-basis to account for its assurance-type warranty costs. What journal entries are necessary to record these transactions? (Record debits first, then credits. Exclude explanations from any journal entries.) Adele Associates manufactures and distributes component parts for car audio systems. Adele's assurance-type warranty covers all repair costs, including parts and labor, for 2 years after the date of sale. During the current year, Adele sold $4,200,000 of component parts to several manufacturers of car audio systems. Ignore cost of goods sold. The company estimates that warranty costs will be 10% of sales. Adele did not make any repairs in the year of the sale. However, during the following year, the company incurred $71,000 in warranty claims. The repair costs include $42,000 in parts and $29,000 in labor (unpaid). Adele uses the accrual-basis to account for its assurance-type warranty costs. What journal entries are necessary to record these transactions? (Record debits first, then credits. Exclude explanations from any journal entries.)

Answer rating: 100% (QA)

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