Question

Flint Company sold 202 color laser copiers on July 10, 2020, for $3,720 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $355. Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2020. Actual warranty costs (inventory) incurred in 2020 were $18,560.

Answer 1

Answer:

Flint Company Journal entry

Jul. 10,2020

Dr Cash 751,440

(202*3,720)

Cr Sales Revenue 751,440

During 2020

Dr Warranty expense 18,560

Cr Inventory 18,560

Dec. 31,2020

Dr Warranty expense 53,150 (202*355)-18,560

Cr Warranty Liability 53,150

Explanation:

On July 10 2020 Flint Company was said to sold 202 of his color laser copiers for $3,720 which means we have to Debit cash with an amount of 751,440(202*3,720) and Credit sales Revenue with the same amount.

December 31, 2020 the Actual warranty costs incurred were $18,560 which means we have to Debit Warranty expense with 18,560 and Credit Inventory with 18,560

The Maintenance on each copier during the warranty period was estimated to be $355 which means we have to Debit Warranty expense with 53,150 [(202*355)-18,560] and

Credit Warranty Liability with 53,150.