Answer:
Amount Debit Credit
Cash $800,000
Sales Revenue $800,000
Warranty Expense $17,000
Cash $17,000
Warranty expense $49,000
Warranty liability $49,000
Explanation:
Given:
Price For each copier=$4,000
Number of copiers sold=200
Maintenance cost on each copier during warranty=$330
Actual Warranty cost=$17,000
Required:
Prepare entries.
Solution:
Amount Debit Credit
Cash ($4,000*200) $800,000
Sales Revenue ($4,000*200) $800,000
Warranty Expense $17,000
Cash $17,000
Warranty expense[($330*200)-17,000] $49,000
Warranty liability $49,000
