Randy Machine Tools sells an industrial lawn mower and offers a two-year warranty to its customers. The company sold 480 units of the lawn mower at an average price of $1,200 per unit in 2016. The company estimated that warranty costs would average $105 per lawn mower over two years. Actual costs incurred by Randy to honour warranty claims in 2016 totalled $28,000 ($17,000 for labor, $10,000 for parts and the rest cash). Required a. Prepare all journal entries in 2016.
Randy Machine Tools sells an industrial lawn mower and offers a two-year warranty to its customers. The company sold 480 units of the lawn mower at an average price of $1,200 per unit in 2016. The company estimated that warranty costs would average $105 per lawn mower over two years. Actual costs incurred by Randy to honour warranty claims in 2016 totalled $28,000 ($17,000 for labor, $10,000 for parts and the rest cash). Required a. Prepare all journal entries in 2016.
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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Randy Machine Tools sells an industrial lawn mower and offers a two-year warranty to its
customers. The company sold 480 units of the lawn mower at an average price of $1,200 per unit
in 2016. The company estimated that warranty costs would average $105 per lawn mower over
two years. Actual costs incurred by Randy to honour warranty claims in 2016 totalled $28,000
($17,000 for labor, $10,000 for parts and the rest cash).
Required
a. Prepare all
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