On June 11 of the current year, a retailer sells a trimmer for $400 with a one-year warranty that covers parts. Warranty expense is estimated at 5% of sales. On March 24 of the next year, the trimmer is brought in for repairs covered under the warranty requiring $15 in materials taken from the Repair Parts Inventory. Prepare the (a) June 11 entry to record the trimmer sale—ignore the cost of sales part of this sales entry—and (b) March 24 entry to record warranty repairs.

On July 10, 2020, Sarasota Music sold CDs to retailers on account and recorded sales revenue of $752,000 (cost $609,120). Sarasota grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Sarasota and were granted credit of $73,700.Prepare Sarasota’s journal entries to record (a) the sale on July 10, 2020, and (b) $73,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Sarasota prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation Debit Credit (a)                                                             enter an account title to record sales on July 10, 2017 enter a debit amount…

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Wally Co. began selling merchandise on November 1, 2022. The company offers a 50-day warranty for defective merchandise. Based on prior experience with similar merchandise, Wally Co. predicts that 2.80% of the units sold will encounter a fault within the warranty period, with a replacement or repair of a damaged unit costing an average of $30. In November, Wally Co. sold 25,000 units and 400 defective units were returned. In December, Wally Co. sold 32,000 units and 544 defective units were returned. The actual cost of replacing the defective units was $38,500. Prepare a journal entry to accrue for the estimated warranty costs for the November and December sales at December 31, 2022. Prepare one summary journal entry at December 31, 2022, to record the cost of replacing the defective merchandise returned during November and December. What amounts will be included in Wally Co.’s 2022 income statement and balance sheet at December 31, 2022, with regard to the warranty? Show steps…

During August, Boxer Company sold $362,000 in merchandise that has a one-year warranty. Based on past experience, warranty expenses are estimated to be about 5% of total sales revenue. Boxer used $8,800 in parts for warranty repairs on merchandise that customers returned. Which of the following statements is correct about the estimated warranty expense for the month? O No recording is needed because the warranty expense is estimated. Boxer's estimated warranty Expense increased by $18,100 this month. O Boxer's estimated warranty liabilities had no change this month. O Boxer's estimated warranty expense decreased by $8,800 this month.

During December, Far West Services makes a $3,600 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. (Note: the sales tax amount is in addition to the credit sale amount.) Record sales and sales tax payable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty costs to equal 7%  of dollar sales. The following transactions occurred.  November 11 Sold 70 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $16,800 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $11,200 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to…

Emperor Pool Services provides pool cleaning and maintenance services to residential clients. It offers a one-year warranty on all services. Review each of the transactions: A. March 31: Emperor provides cleaning services for 25 pools during the month of March at a sales price per pool of $610 cash. Emperor records warranty estimates when sales are recognized and bases warranty estimates on 1 percent of sales. B. April 5: A customer files a warranty claim that Emperor honors in the amount of $130 cash. C. April 13: Another customer, J. Jones, files a warranty claim that Emperor does not honor due to customer negligence. D. June 8: J. Jones files a lawsuit requesting damages related to the dishonored warranty in the amount of $2,100. Emperor determines that the lawsuit is likely to end in the plaintiff's favor and the $2,100 is a reasonable estimate for damages. Prepare any necessary journal entries for each situation. If an amount box does not require an entry, leave it blank. If no…

Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $202,000 for January. On February 7, a customer received warranty repairs requiring $140 of parts and $105 of labor. Question Content Area a.  Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. _______   _______ ______           Question Content Area b.  Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. ___________   _______ _______