Use the following information to answer the next three questions.
Bruges Electronics Inc.offers one model of laptop computer for £1000 and a two-year warranty for £250.The retailer, as part of a Boxing Day promotion, offers a limited-time offer for the laptop, including delivery and the two-year warranty for £1,180.The cost of the computer to Bruges is £700.Any warranty repairs are assumed to be done ratably over time.Bruges accounts for transactions using the customer consideration model.
In the first twelve months following the sale, Bruges incurred £980 of costs servicing the computers under warranty.
-In the first twelve months, Bruges would record warranty expense of

Question

Quizplus · Accepted Answer

Warranty expense is recognized ratably over the warranty period. In the first twelve months, the warranty expense would be £250 * 12/24 = £784.

Use the Following Information to Answer the Next Three Questions