During 2017, Alaa Company sold 600 TVfor $500 each. The sold items include aone-year warranty. The managerestimated that 5% of these TVs will bedefective and the warranty repair cost is$40 per TV. In 2017, Alaa honors warrantycontracts for 12 TVs. During the firstmonth of 2018, the company honorswarranty contracts for 3 TVs. The adjusting entry to record the honoringof warranty contracts in January 2018 is: *Debit Warranty Liability $480 Credit Cash$480Debit Warranty Liability $480 Credit RepairParts $480Debit Warranty Liability $120 Credit RepairParts $120Debit Warranty Liability $120 Credit Cash$120None of the above

It is the provision created by the company for the repair of defective goods that is return by the…

During 2017, Alaa Company sold 600 TV for $500 each. The sold items include a one-year warranty. The manager estimated that 5% of these TVs will be defective and the warranty repair cost is $40 per TV. In 2017, Alaa honors warranty contracts for 12 TVs. During the first month of 2018, the company honors warranty contracts for 3 TVs.

During 2017, Alaa Company sold 600 TV for $500 each. The sold items include a one-year warranty. The manager estimated that 5% of these TVs will be defective and the warranty repair cost is $40 per TV. In 2017, Alaa honors warranty contracts for 12 TVs. During the first month of 2018, the company honors warranty contracts for 3 TVs.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9MC: Blake Department Store sells television sets with one-year warranties that cover repair and...

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