Soundgarden Company sold 184 color laser copiers in 2014 for $5,960 apiece, toge
ID: 2478202 • Letter: S
Question
Soundgarden Company sold 184 color laser copiers in 2014 for $5,960 apiece, together with a one-year warranty. Maintenance on each copier during the warranty period averages $396.
No.
Account Titles and Explanation
Debit
Credit
(To record the warranty expense)
(To record the warranty liabilitiy)
SHOW LIST OF ACCOUNTS
No.
Account Titles and Explanation
Debit
Credit
Soundgarden Company sold 184 color laser copiers in 2014 for $5,960 apiece, together with a one-year warranty. Maintenance on each copier during the warranty period averages $396.
Explanation / Answer
Answer:
On Accrual Basis,
1) Cash Dr. 1,096,640
Sales revenue Cr. 1,096,640
(Sales amount = No. oof Copier sold * Price per piece = 184 * 5960 = 1,096,640 )
2) Warranty Expense Dr. 72,864
Accrued Warranty Liabiltty Cr. 72,864
(Warranty expenses = No. of coppier sold * Average warranty expense = 184 * 396 = $72,864 )
3) Accrued warranty Liability Dr. 20,860
Cash Cr. 20,860
(Warranty claimed)
On Cash basis.
1) Cash Dr. 1,096,640
Sales revenue Cr. 1,096,640
(Sales amount = No. oof Copier sold * Price per piece = 184 * 5960 = 1,096,640 )
2) Warranty expense Dr. 20,860
Cash Cr. 20,860.
(Actual expense recorded)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.