Sarasota Factory provides a 2-year warranty with one of its products which was first sold in 2020. Sarasota sold $905,400 of products subject to the warranty. Sarasota expects $117,280 of warranty costs over the next 2 years. In that year, Sarasota spent $65,340 servicing warranty claims. Prepare Sarasota's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (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.) Date 2020 During 2020 12/31/20 Account Titles and Explanation Cash (To record sales) (To record warranty claims) I Debit Credit
Sarasota Factory provides a 2-year warranty with one of its products which was first sold in 2020. Sarasota sold $905,400 of products subject to the warranty. Sarasota expects $117,280 of warranty costs over the next 2 years. In that year, Sarasota spent $65,340 servicing warranty claims. Prepare Sarasota's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (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.) Date 2020 During 2020 12/31/20 Account Titles and Explanation Cash (To record sales) (To record warranty claims) I Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sarasota Factory provides a 2-year warranty with one of its products which was first sold in 2020. Sarasota sold $905,400 of products
subject to the warranty. Sarasota expects $117,280 of warranty costs over the next 2 years. In that year, Sarasota spent $65,340
servicing warranty claims. Prepare Sarasota's journal entry to record the sales (ignore cost of goods sold) and the December 31
adjusting entry, assuming the expenditures are inventory costs. (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.)
Date
2020
During 2020
12/31/20
Account Titles and Explanation
Cash
(To record sales)
(To record warranty claims)
X
Debit
Credit
11
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