Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (c) The recognition of warranties revenue
Al Jabel Corporation sells WIFI speakers and offers 2-year warranty contract to customers. During 2020 Al Jabel sold 15,000 warranty contract at $99 each. Al Jabel spent $ 135,000 serving warranties during 2020, and it estimates that an additional $675,000 will be spent in the future to service the warranties. Prepare journal entries for: (a) The sale of contract (b) The cost of servicing warranties (c) The recognition of warranties revenue
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 57BE
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