In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates that repair costs will average 2% of the total selling price. Required: 1. How much is recorded in the warranty liability account as a result of selling the water heaters during 2013, assuming no warranty service has yet been performed?$ Hide 2. Prepare the necessary adjusting entry at December 31, 2013. Dec. 31 (Record warranty expense)
In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates that repair costs will average 2% of the total selling price. Required: 1. How much is recorded in the warranty liability account as a result of selling the water heaters during 2013, assuming no warranty service has yet been performed?$ Hide 2. Prepare the necessary adjusting entry at December 31, 2013. Dec. 31 (Record warranty expense)
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 31CE
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In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates that repair costs will average 2% of the total selling price.
Required:
1. How much is recorded in the warranty liability account as a result of selling the water heaters during 2013, assuming no warranty service has yet been performed?
$
2. Prepare the necessary
|
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