Commander Appliance Store prepares annual financial statements.At December 31,2019.Commander needs to analyze the following items to determine the whether adjusting entries are required for 2019.
1.Twenty-two employees worked during 2019 and each of them will take two weeks of vacation in 2020.Twelve of these employees earn $500 per week and 10 employees earn $800 per week.(If an adjusting entry is required,ignore payroll taxes on this item. )
2.Office rent for January,2020 has not yet been paid.
3.Commander sold 3,000 coffee brewing machines for total sales of $150,000.Commander expects that 30 machines will need warranty repairs in the next two years and estimates the cost of repairs to be $2,400.
4.Commander has been sued by a customer and assesses the probability of losing the lawsuit to be reasonably possible.The estimate of the contingency loss is $20,000.
For each item listed,determine whether there should be an accrual and adjusting entry at December 31,2019.If so,then prepare the adjusting entry.If not,state the reason for not accruing a liability.

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The Answer of Commander Appliance Store prepares annual financial statements.At December 31,2019.Commander needs to analyze the following items to determine the whether adjusting entries are required for 2019.
1.Twenty-two employees worked during 2019 and each of them will take two weeks of vacation in 2020.Twelve of these employees earn $500 per week and 10 employees earn $800 per week.(If an adjusting entry is required,ignore payroll taxes on this item. )
2.Office rent for January,2020 has not yet been paid.
3.Commander sold 3,000 coffee brewing machines for total sales of $150,000.Commander expects that 30 machines will need warranty repairs in the next two years and estimates the cost of repairs to be $2,400.
4.Commander has been sued by a customer and assesses the probability of losing the lawsuit to be reasonably possible.The estimate of the contingency loss is $20,000.
For each item listed,determine whether there should be an accrual and adjusting entry at December 31,2019.If so,then prepare the adjusting entry.If not,state the reason for not accruing a liability.

Commander Appliance Store Prepares Annual Financial Statements