Answer:
1.$ 280
2. $280
3.$0
4. $174
5. (a) Aug 16 2018
Dr Cash 7,000
Cr Sales 7,000
(b) Aug 16 2018
Dr Cost of goods sold 3,500
Cr Merchandise inventory 3,500
(c) Aug 16 2018
Dr Warranty expense 280
Cr Estimated warranty liability 280
(d) Nov 22 2019
Dr Estimated warranty liability 106
Cr Repair part inventory 106
Step-by-step explanation:
1. Calculation for how much warranty expense does the company report in 2018 for this copier
Warranty Expense= 7,000 x 0.04
Warranty Expense= $280
2. Calculation for How much is the estimated warranty liability for this copier as of December 31, 2018
2018 Estimated Warranty liability= 7,000 x 0.04
2018 Estimated Warranty liability=$280
3. Calculation for How much warranty expense does the company report in 2019 for this copier
The company in the year 2019 report $0 warranty expense for the copier.
4. Calculation for How much is the estimated warranty liability for this copier as of December 31, 2019?
2019 Estimated warranty liability =280-106
2019 Estimated warranty liability =174
5. Preparation of the Journal entries to record (a) the copier sales (b) the Adjustment on Dec 31 2018 to recognize the warranty expense (c) the repairer that occured in November 2019
(a) Aug 16 2018
Dr Cash 7,000
Cr Sales 7,000
(b) Aug 16 2018
Dr Cost of goods sold 3,500
Cr Merchandise inventory 3,500
(c) Aug 16 2018
Dr Warranty expense 280
Cr Estimated warranty liability 280
(d) Nov 22 2019
Dr Estimated warranty liability 106
Cr Repair part inventory 106
