Patterson Limited offers a 12-month warranty for the sale of used motorbikes. On 1 April 2021, the beginning of the financial year, there was a credit balance of $280,000 in its Warranty Provision account. During the year ended 31 March 2022, Patterson Limited incurred $260,000 in warranty costs for spare parts. At 31 March 2022, Patterson Limited estimated its liability for unexpired warranty contracts as $300,000. Prepare the necessary period end general journal entry to record the update required to the warranty provision, assuming an annual accounting period.
Patterson Limited offers a 12-month warranty for the sale of used motorbikes. On 1 April 2021, the beginning of the financial year, there was a credit balance of $280,000 in its Warranty Provision account. During the year ended 31 March 2022, Patterson Limited incurred $260,000 in warranty costs for spare parts. At 31 March 2022, Patterson Limited estimated its liability for unexpired warranty contracts as $300,000. Prepare the necessary period end general journal entry to record the update required to the warranty provision, assuming an annual accounting period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Patterson Limited offers a 12-month warranty for the sale of used motorbikes. On 1 April 2021, the beginning of the financial year, there was a credit balance of $280,000 in its Warranty Provision account. During the year ended 31 March 2022, Patterson Limited incurred $260,000 in warranty costs for spare parts. At 31 March 2022, Patterson Limited estimated its liability for unexpired warranty contracts as $300,000.
Prepare the necessary period end general
Transcribed Image Text:Fill in your answer in the boxes provided. Not all boxes need to be completed. For general
journal entries, narrations are NOT required and ignore GST. Make sure each Debit (Dr) and
Credit (Cr) entry is typed in on a separate line within the Inspera text answer box.
Account Debited
Account Credited
Debit $
Credit $
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