Hitzu Company sold a copler (that costs $7,500) for $15,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copler requires on-site repairs that are completed the same day. The repairs cost $111 for materials taken from the parts Inventory. These are the only repairs required in Year 2 for this copler. Analyze each of the following transactions: (a) the copler's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically. Identify the accounts and amounts (including- or -) for each. Note: Enter all amounts as positive value. Date August 16 August 16 December 31 January 5 Assets Liabilities + + + Equity
Hitzu Company sold a copler (that costs $7,500) for $15,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copler requires on-site repairs that are completed the same day. The repairs cost $111 for materials taken from the parts Inventory. These are the only repairs required in Year 2 for this copler. Analyze each of the following transactions: (a) the copler's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically. Identify the accounts and amounts (including- or -) for each. Note: Enter all amounts as positive value. Date August 16 August 16 December 31 January 5 Assets Liabilities + + + Equity
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
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 14P: Assurance-Type Warranty Clean-All Inc. sells washing machines with a 3-year assurance-type warranty....
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Question
Hitzu Company sold a copler (that costs $7.500) for $15,000 cash with a two-year parts warranty to a customer on August
16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on
December 31. On January 5 of Year 2 the copler requires on-site repairs that are completed the same day. The repairs
cost $111 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copler.
![Required Information
[The following Information applies to the questions displayed below.]
Hitzu Company sold a copler (that costs $7,500) for $15,000 cash with a two-year parts warranty to a customer on August
16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on
December 31. On January 5 of Year 2, the copler requires on-site repairs that are completed the same day. The repairs
cost $111 for materials taken from the parts Inventory. These are the only repairs required in Year 2 for this copler.
Analyze each of the following transactions: (a) the copler's sale; (b) the adjustment to recognize the warranty expense on December 31
of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically,
Identify the accounts and amounts (including- or -) for each.
Note: Enter all amounts as positive value.
Date
August 16
August 16
December 31
January 5
Assets
=
=
=
Liabilities
+
+
+
+
Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0741072d-2037-4e03-bf65-34f3ebe7fdc3%2F1b3724cd-a90d-4e2f-b044-877c0b169821%2F7k6ynph_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
[The following Information applies to the questions displayed below.]
Hitzu Company sold a copler (that costs $7,500) for $15,000 cash with a two-year parts warranty to a customer on August
16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on
December 31. On January 5 of Year 2, the copler requires on-site repairs that are completed the same day. The repairs
cost $111 for materials taken from the parts Inventory. These are the only repairs required in Year 2 for this copler.
Analyze each of the following transactions: (a) the copler's sale; (b) the adjustment to recognize the warranty expense on December 31
of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically,
Identify the accounts and amounts (including- or -) for each.
Note: Enter all amounts as positive value.
Date
August 16
August 16
December 31
January 5
Assets
=
=
=
Liabilities
+
+
+
+
Equity
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