Exercise 13-10 Pearl Company sold 180 color laser copiers on July 10, 2017, for

Question

Exercise 13-10

Pearl Company sold 180 color laser copiers on July 10, 2017, for $3,810 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $309.

Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2017. Actual warranty costs (inventory) incurred in 2017 were $17,600. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Date

Account Titles and Explanation

Debit

Credit

Jul. 10, 2017During 2017Dec. 31, 2017

Jul. 10, 2017During 2017Dec. 31, 2017

Jul. 10, 2017During 2017Dec. 31, 2017

Explanation / Answer

Journal entries:

Date Account titles Debit Credit July 10. Cash(180×$3810) $685,800 Sales revenue $685,800 (To record sales of copiers) Dec 31,2017 Warranty expense $17,600 Inventory $17,600 (To record actual warranty Expense Incurred) Dec 31,2016 Warranty expense {(180×$309)-$17,600} $38,020 Warranty liability $38,020 (To record accrued liability)

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