Pharoah Equipment Company sells computers for $1760 each and also gives each customer a 2-year warranty...

 

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Pharoah Equipment Company sells computers for $1760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Pharoah incurred actual warranty costs relative to 2020 computer sales of $10400 for parts and $15600 for labor. Your answer is correct. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation 2020 Accounts Receivable 2021 Sales Revenue (To record sale of computers) 2020 Warranty Expense Warranty Liability (To record liability against warranty costs) Warranty Liability Inventory Cash, Accrued Payroll e Textbook and Media List of Accounts Your answer is partially correct. Debit $1,636,800.00 $ $93,000.00 $26,000.00 $1,636,800.00 $93,000.00 $10,400.00 $15,600.00 The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty Liability Pharoah Equipment Company sells computers for $1760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Pharoah incurred actual warranty costs relative to 2020 computer sales of $10400 for parts and $15600 for labor. Your answer is correct. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation 2020 Accounts Receivable 2021 Sales Revenue (To record sale of computers) 2020 Warranty Expense Warranty Liability (To record liability against warranty costs) Warranty Liability Inventory Cash, Accrued Payroll e Textbook and Media List of Accounts Your answer is partially correct. Debit $1,636,800.00 $ $93,000.00 $26,000.00 $1,636,800.00 $93,000.00 $10,400.00 $15,600.00 The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty Liability Pharoah Equipment Company sells computers for $1760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Pharoah incurred actual warranty costs relative to 2020 computer sales of $10400 for parts and $15600 for labor. Your answer is correct. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation 2020 Accounts Receivable 2021 Sales Revenue (To record sale of computers) 2020 Warranty Expense Warranty Liability (To record liability against warranty costs) Warranty Liability Inventory Cash, Accrued Payroll e Textbook and Media List of Accounts Your answer is partially correct. Debit $1,636,800.00 $ $93,000.00 $26,000.00 $1,636,800.00 $93,000.00 $10,400.00 $15,600.00 The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty Liability Pharoah Equipment Company sells computers for $1760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Pharoah incurred actual warranty costs relative to 2020 computer sales of $10400 for parts and $15600 for labor. Your answer is correct. Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation 2020 Accounts Receivable 2021 Sales Revenue (To record sale of computers) 2020 Warranty Expense Warranty Liability (To record liability against warranty costs) Warranty Liability Inventory Cash, Accrued Payroll e Textbook and Media List of Accounts Your answer is partially correct. Debit $1,636,800.00 $ $93,000.00 $26,000.00 $1,636,800.00 $93,000.00 $10,400.00 $15,600.00 The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty Liability

Answer rating: 100% (QA)

ANSWER The transactions of part a create wh... View the full answer