Matrix Company sold 5,000 computers on September 1, 2024, at a total price of $5,000,000, with a warranty guarantee that the product was free of defects. The cost of the computers is $3,550,000. The term of this assurance warranty is 2 years, which Matrix estimates will cost $77,000. In addition, Matrix sold extended warranties related to 2,000 computers for 3 years beyond the 2-year period for $180 per computer. On November 22, 2024, Matrix incurred labor costs of $3,000 and part costs of $25,000 related to the assurance warranties. Matrix prepares financial statements on December 31, 2024. It estimates that its future assurance warranty costs will total $50,000 at December 31, 2024. A) Prepare the journal entries to record this transaction on September 1, 2024. B) Prepare the journal entry on November 22, 2024. C) Prepare the journal entry on December 31, 2024 (assuming financial statements are prepared on December 31)
Matrix Company sold 5,000 computers on September 1, 2024, at a total price of $5,000,000, with a warranty guarantee that the product was free of defects. The cost of the computers is $3,550,000. The term of this assurance warranty is 2 years, which Matrix estimates will cost $77,000. In addition, Matrix sold extended warranties related to 2,000 computers for 3 years beyond the 2-year period for $180 per computer. On November 22, 2024, Matrix incurred labor costs of $3,000 and part costs of $25,000 related to the assurance warranties. Matrix prepares financial statements on December 31, 2024. It estimates that its future assurance warranty costs will total $50,000 at December 31, 2024.
A) Prepare the journal entries to record this transaction on September 1, 2024.
B) Prepare the
C) Prepare the journal entry on December 31, 2024 (assuming financial statements are prepared on December 31).
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