Jewellery Limited manufactures and sells different kinds of handmade fine jewellery. The company warrants its products for one year. The average price per piece of jewellery is $5,000 and the company sold 800 products in 2018. By the end of 2018, based on historical information the company estimates 5% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $100. During 2019, customers have returned 20 pieces of jewellery sold that year for repairs. By the end of 2019, the company expects 7% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $120. The company sold 900 products in 2019 with the same average price per piece of 5,000. The balance day of Jewellery Limited is 31 December. Record the necessary journal entries in 2018 and 2019 regarding the warranty.
Jewellery Limited manufactures and sells different kinds of handmade fine jewellery. The company warrants its products for one year. The average price per piece of jewellery is $5,000 and the company sold 800 products in 2018. By the end of 2018, based on historical information the company estimates 5% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $100. During 2019, customers have returned 20 pieces of jewellery sold that year for repairs. By the end of 2019, the company expects 7% of the jewellery sold to develop defective parts within one year. The estimated average cost of warranty repairs per defective item is $120. The company sold 900 products in 2019 with the same average price per piece of 5,000. The balance day of Jewellery Limited is 31 December.
Record the necessary
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