Cheyenne Harvest Company sells a product that includes a one-year warranty on parts and labor. During...

 

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Cheyenne Harvest Company sells a product that includes a one-year warranty on parts and labor. During the year, 8,800 units are sold. Cheyenne Harvest expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $12,320. Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (a) Account Titles and Explanation Debit Credit (b) Cheyenne Harvest Company sells a product that includes a one-year warranty on parts and labor. During the year, 8,800 units are sold. Cheyenne Harvest expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $12,320. Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (a) Account Titles and Explanation Debit Credit (b)

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a To record the estimated warranty costs Debit Warran... View the full answer