DateAccount Titles and ExplanationDebitCreditDuring 2017(To record sales)(To record cash spent on servicing warranty claims)Decemebr 31,2017 Cheyenne Appliances provides a 3-year warranty with one of its products, which was first sold in 2017. Cheyenne sold $2,200,000 ofproducts subject to the warranty. Cheyenne expects $242,000 of warranty costs over the next 3 years. In 2017, Cheyenne spent$127,000 servicing warranty claims.Prepare Cheyenne's journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming theexpenditures are inventory costs; Cheyenne now expects future warranty costs of $138,000. (If no entry is required, select "No Entry" forthe account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indentmanually.)

The question is based on the concept of Financial Accounting.Date Account Titles and Explanation Debit Credit During 2017 Cash / Accounts Receivable 2200000 Sales Revenue 2200000 (To record Sales) Warranty expense 127000 Inventory / Cash 127000 (To record cash spent on servicing Warranty claims) December 31,2017 Warranty expense 138000 Warranty Payable 138000

Answered: Date Account Titles and Explanation…

Business

Accounting

Date Account Titles and Explanation Debit Credit During 2017 (To record sales) (To record cash spent on servicing warranty claims) Decemebr 31, 2017

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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