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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 18
Accounting for warranty expense and warranty payable
Trekster Corporation guarantees its snowmobiles for three years. Company experience indicates that warranty costs will add up to 4% of sales.
Assume that the Trekster dealer in Colorado Springs made sales totaling $533,000 during 2012. The company received cash for 30% of the sales and notes receivable for the remainder. Warranty payments totaled $17,000 during 2012.
Requirements
1. Record the sales, warranty expense, and warranty payments for the company.
2. Post to the Estimated warranty payable T-account. At the end of 2012, how much in Estimated warranty payable does the company owe
Trekster Corporation guarantees its snowmobiles for three years. Company experience indicates that warranty costs will add up to 4% of sales.
Assume that the Trekster dealer in Colorado Springs made sales totaling $533,000 during 2012. The company received cash for 30% of the sales and notes receivable for the remainder. Warranty payments totaled $17,000 during 2012.
Requirements
1. Record the sales, warranty expense, and warranty payments for the company.
2. Post to the Estimated warranty payable T-account. At the end of 2012, how much in Estimated warranty payable does the company owe
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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