Aqua Bay Solutions sells residential hot tubs for $6,150 each. The price includes a two- year...

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Aqua Bay Solutions sells residential hot tubs for $6,150 each. The price includes a two- year warranty. During 2021, the company sells 300 hot tubs. On the basis of past experience, the warranty costs are estimated to be $460 per hot tub sold. The actual warranty costs paid by Aqua Bay during 2021 were $125,000. Instructions a. Prepare general journal entries to record the estimated warranty expense and the warranty payments during 2021. b. Assuming the liability has an unadjusted credit balance of $5,000, what is the 2021 adjusted liability balance? Aqua Bay Solutions sells residential hot tubs for $6,150 each. The price includes a two- year warranty. During 2021, the company sells 300 hot tubs. On the basis of past experience, the warranty costs are estimated to be $460 per hot tub sold. The actual warranty costs paid by Aqua Bay during 2021 were $125,000. Instructions a. Prepare general journal entries to record the estimated warranty expense and the warranty payments during 2021. b. Assuming the liability has an unadjusted credit balance of $5,000, what is the 2021 adjusted liability balance?

Answer rating: 100% (QA)

a To record the estimated warranty expense and warranty payments during 2021 the fo... View the full answer