Professional Documents
Culture Documents
Sales
Actual warranty repairs
Requirements
1 Prepare journal entries in connection with the warranty using
the expense as incurred approach
Journal Entries
2020
1. To record the sales
Cash
Sales
Estimated warranty liability
Cash
2021
1. To record the sales
Cash
Sales
Estimated warranty liability
Cash
2 Prepare journal entries in connection with the warranty using
the accrual approach.
Journal Entries
2020
1. To record the sales
Cash
Sales
2. To record the warranty expense
Warranty expense
Estimated warranty liability
2021
First contract year of July 1,2020 sales
2022
Second contract year of July 1,2020 sales
2022
First contract year of July 1,2020 sales
2023
Second contract year of July 1,2020 sales
o- year warranty
4%
10%
2020 2021
5,000,000 9,000,000
200,000 560,000
5,000,000.00
5,000,000.00
200,000.00
200,000.00
9,000,000.00
9,000,000.00
560,000.00
560,000.00
5,000,000.00
5,000,000.00
700,000.00
700,000.00
200,000.00
200,000.00
9,000,000.00
9,000,000.00
1,260,000.00
1,260,000.00
560,000.00
560,000.00
700,000.00
1,260,000.00 1,960,000.00
200,000.00
560,000.00 760,000.00
1,200,000.00 per book
100,000.00
50,000.00
50,000.00
250,000.00
125,000.00
125,000.00
700,000.00
180,000.00
90,000.00
90,000.00
450,000.00
225,000.00
225,000.00
1,260,000.00
125,000.00
90,000.00
450,000.00
450,000.00
1,115,000.00
1,200,000.00
(85,000.00)
85,000.00
85,000.00