On August $1,$ Year $1,$ Pereira Corporation has sold $1,500$ Wiglows to Mendez Company at $$420$ each. Mendez also purchased a $1-$year service$-$type warranty on all the Wiglows for $$10$ per unit. In Year $1,$ On December $31,$ Pereira recorded warranty costs incurred in Year $1$ of $$9,000.$ Warranty costs for Year $2$ of $$3,000$ were recorded on July $31.$

Required:

$1.$ Prepare the journal entries for the preceding transactions.

$2.$ Show how Pereira would report the items on the December $31,$ Year $1,$ balance sheet.

Answer rating: 100% (QA)

1 Journal Entries August 1 Year 1 Accounts Receivable 630000 Sales Revenue 630000 To recor... View the full answer