1)Suppose the company in the previousquestion offers a two-year extendedwarranty, which it sells, separate from thecomputer. In 2020, extended warranty salestotaled $ 20,000. During 2020 the companyincurred $ 2,500 in costs related to theextended warranties. In the Statement ofSituation of December 31, 2020, the companywill recognize:a.Warranties payable for $ 17,500b. $ 20,000 unearned warranty revenuec. Warranties payable for $ 2,500d. Unearned warranty revenue of $ 17,5002)A company offers two-year warranties at noadditional cost on the computers it sells. In2020, the company had computer sales of $200,000 and estimated that the cost ofwarranties for those computers would be $8,000. During 2020, the company incurred $1,800 in costs to honor the guarantees of thecomputers sold in 2020. In the Statement ofSituation of December 31, 2020, the companywill recognize guarantee debt in the amountof:a. $ 0. The remaining $ 6,200 corresponds to2021.b. $ 6,200, since the debt is recognized in2020, the year the computers were soldC. $ 8,000, which was the estimated amount

Given:Company offers two year extension warrantyExtended warranty sales total=$20000During 2020 the…

1)Suppose the company in the previous question offers a two-year extended warranty, which it sells, separate from the computer. In 2020, extended warranty sales totaled $ 20,000. During 2020 the company incurred $ 2,500 in costs related to the extended warranties. In the Statement of Situation of December 31, 2020, the company will recognize: a.Warranties payable for $ 17,500 b. $ 20,000 unearned warranty revenue c. Warranties payable for $ 2,500 d. Unearned warranty revenue of $ 17,500

1)Suppose the company in the previous question offers a two-year extended warranty, which it sells, separate from the computer. In 2020, extended warranty sales totaled $ 20,000. During 2020 the company incurred $ 2,500 in costs related to the extended warranties. In the Statement of Situation of December 31, 2020, the company will recognize: a.Warranties payable for $ 17,500 b. $ 20,000 unearned warranty revenue c. Warranties payable for $ 2,500 d. Unearned warranty revenue of $ 17,500

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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