On September 1, 2013, Carolina Electronics company has 800 Blu-ray players ready

Question

On September 1, 2013, Carolina Electronics company has 800 Blu-ray players ready for sale. on October 1, 2013, 680 are sold at $105 each with a 1-year warranty. Carolina estimates that the warranty cost on each Blue-Ray player sold will probably average $12 per unit. During the final 3 months of 2013, Carolina incurred warranty costs of 3,290, and in 2014 warranty costs were 4,870.
Prepare the journal entries for the preceding transactions using the expense warranty accrual method On September 1, 2013, Carolina Electronics company has 800 Blu-ray players ready for sale. on October 1, 2013, 680 are sold at $105 each with a 1-year warranty. Carolina estimates that the warranty cost on each Blue-Ray player sold will probably average $12 per unit. During the final 3 months of 2013, Carolina incurred warranty costs of 3,290, and in 2014 warranty costs were 4,870.
Prepare the journal entries for the preceding transactions using the expense warranty accrual method
Prepare the journal entries for the preceding transactions using the expense warranty accrual method

Explanation / Answer

Date Account title Debit credit Oct1 cash 71400 Sales 71400 [sales made ] Oct1 Warranty expense   (12*680) 8160 Warranty liability 8160 [being warranty liability accrued ] 31 dec 2013 Warranty liability 3290 cash 3290 2014 Warranty liability 4870 cash 4870

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