On January 1, 2023, Sunland Ltd. sold on account 1,400 units of its product for a total price of $537,000 with a warranty guarant that the products were free of any defects. The products have a one-year assurance-type warranty and Sunland estimates that th cost will be $25,800. The cost of the units is $447,000. In addition, the company sold extended warranties related to 400 units for one-year period beyond the one-year assurance period at a cost of $15,200. By the company's year-end, December 31, 2023, no warranty costs were incurred. By the company's year-end, December 31, 2024, $9,545 of warranty costs were incurred and paid cash. Prepare the appropriate journal entries for 2023 and 2024.
On January 1, 2023, Sunland Ltd. sold on account 1,400 units of its product for a total price of $537,000 with a warranty guarant that the products were free of any defects. The products have a one-year assurance-type warranty and Sunland estimates that th cost will be $25,800. The cost of the units is $447,000. In addition, the company sold extended warranties related to 400 units for one-year period beyond the one-year assurance period at a cost of $15,200. By the company's year-end, December 31, 2023, no warranty costs were incurred. By the company's year-end, December 31, 2024, $9,545 of warranty costs were incurred and paid cash. Prepare the appropriate journal entries for 2023 and 2024.
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 10RE
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On January 1, 2023, Sunland Ltd. sold on account 1,400 units of its product for a total price of $537,000 with a warranty guarant that the products were free of any defects. The products have a one-year assurance-type warranty and Sunland estimates that th cost will be $25,800. The cost of the units is $447,000. In addition, the company sold extended warranties related to 400 units for one-year period beyond the one-year assurance period at a cost of $15,200. By the company's year-end, December 31, 2023, no warranty costs were incurred. By the company's year-end, December 31, 2024, $9,545 of warranty costs were incurred and paid cash. Prepare the appropriate
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