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
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Date
Account Titles and Explanation
Debit
Credit
During 2017
(To record sales)
(To record cash spent on servicing warranty claims)
Decemebr 31,
2017
Transcribed Image Text:Date Account Titles and Explanation Debit Credit During 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 of
products 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 the
expenditures are inventory costs; Cheyenne now expects future warranty costs of $138,000. (If no entry is required, select "No Entry" for
the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent
manually.)
Transcribed Image Text:Cheyenne Appliances provides a 3-year warranty with one of its products, which was first sold in 2017. Cheyenne sold $2,200,000 of products 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 the expenditures are inventory costs; Cheyenne now expects future warranty costs of $138,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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