Exercise 13-11 Early in 2017, Marigold Equipment Company sold 600 Rollomatics du
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Question
Exercise 13-11
Early in 2017, Marigold Equipment Company sold 600 Rollomatics during 2017 at $5,600 each. During 2017, Marigold spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
Date
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
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Date
Account Titles and Explanation
Debit
Credit
(To record warranty revenue)
Exercise 13-11
Early in 2017, Marigold Equipment Company sold 600 Rollomatics during 2017 at $5,600 each. During 2017, Marigold spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
Explanation / Answer
1.
Date
Account Titles and Explanation
Debit
Credit
At Sale During 2017Dec. 31, 2017
Cash
3360000
Sales Revenue
(Record sale of Rollomatics 600 x 5600 )
3360000
At Sale During 2017Dec. 31, 2017
Warranty Expense
20000
Cash
(To record Amount spent in servicing during the year)
20000
At Sale During 2017Dec. 31, 2017
Warranty Expense
38000
Estimated Liabilities Warranties
(To Estimate remaining warranty expense)
38000
2.
Date
Account Titles and Explanation
Debit
Credit
At SaleDuring 2017Dec. 31, 2017
Cash
3360000
Sales Revenue
Unearned Warranty Revenue
(Record sale of Rollomatics 600 x 5600)
3301000
59000
At SaleDuring 2017Dec. 31, 2017
Warranty Expense
20000
Cash
20000
At SaleDuring 2017Dec. 31, 2017
Unearned warranty Revenue
20345
Warranty Revenue
20345
(warranty revenue = 20000/58000) x 59000) = 20345
Date
Account Titles and Explanation
Debit
Credit
At Sale During 2017Dec. 31, 2017
Cash
3360000
Sales Revenue
(Record sale of Rollomatics 600 x 5600 )
3360000
At Sale During 2017Dec. 31, 2017
Warranty Expense
20000
Cash
(To record Amount spent in servicing during the year)
20000
At Sale During 2017Dec. 31, 2017
Warranty Expense
38000
Estimated Liabilities Warranties
(To Estimate remaining warranty expense)
38000
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