Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $580,000. Actual warranty expenditures in January of the following year were $22,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 4% of sales. 2. Record the payment of the actual warranty expenditures of $22,000 in January of the following year.

Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $580,000. Actual warranty expenditures in January of the following year were $22,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 4% of sales. 2. Record the payment of the actual warranty expenditures of $22,000 in January of the following year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $400,000. Actual warranty expenditures in January of the following year were $13,000. Required: 1. Does this situation represent a contingent liability? 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. 4. What is the balance in the Warranty Liability account after the entries in Parts 2 and 3?
Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $600,000. Actual warranty expenditures in January of the following year were $13,000.Required:1. Does this situation represent a contingent liability? Why or why not?2. Record warranty expense and warranty liability for the month of December based on 6% of sales.3. Record the payment of the actual warranty expenditures of $13,000 in January of the following year. 4. What is the balance in the Warranty Liability account after the entries in requirements 2 and 3?
Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $420,000. Actual warranty expenditures in January of the following year were $14,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 5% of sales. 2. Record the payment of the actual warranty expenditures of $14,000 in January of the following year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Record warranty expense and warranty liability for the month of December based on 5% of sales. Note: If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. View…
Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $450,000. Actual warranty expenditures in January of the following year were $15,500. Exercise 8-14A Part 4 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3?
Required information [The following information applies to the questions displayed below.] Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $480,000. Actual warranty expenditures in January of the following year were $17,000.
[The following information applies to the questions displayed below.] Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $570,000. Actual warranty expenditures in January of the following year were $21,500. 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
[The following information applies to the questions displayed below.] Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $570,000. Actual warranty expenditures in January of the following year were $21,500. Required:1. Does this situation represent a contingent liability?
[The following information applies to the questions displayed below.] Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $570,000. Actual warranty expenditures in January of the following year were $21,500. 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3?
Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $450,000. Actual warranty expenditures in January of the following year were $15,500. Exercise 8-14A Parts 2 & 3 2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500.
A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. Sales for the month of December are $530,000. Actual warranty expenditures in January of the following year were $19,500. 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3? Warranty Liability
Modem Appliances, Inc. sells food processors for $150 with a 120-day warranty against defects. Past experience indicates that 5% of the processors will have some defect during the warranty period and that the necessary repairs and adjustments will cost $25 per defective unit. Sales for August are $225,000. What is the estimated liability for product warranties for units sold in August? Select one: a. $3,000 b. $1,800 C. $11,250 d. $1,875 e. None of the above