Required: 1. Prepare journal entries in connection with the warranty using the “expense as incurred” approach.2. Prepare journal entries in connection with the warranty using the “accrual” approach. In 2021, Beginner Pottery Company began selling a new calculator that carried a two-year warranty against defects.Beginner Pottery projected the estimated warranty cost (as a percent of sales) as follows:First year of warrantySecond year of warranty4%10%Sales and actual warranty repairs were:20229,000,000560,0002021Sales5,000,000200,000Actual warranty repairs

Warranty is a form of assurance that is being provided by seller to the buyer that in case product…

Answered: Required: 1. Prepare journal entries in…

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 57BE

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Required:
1. Prepare journal entries in connection with the warranty using the “expense as incurred” approach.
2. Prepare journal entries in connection with the warranty using the “accrual” approach.

In 2021, Beginner Pottery Company began selling a new calculator that carried a two-year warranty against defects.
Beginner Pottery projected the estimated warranty cost (as a percent of sales) as follows:
First year of warranty
Second year of warranty
4%
10%
Sales and actual warranty repairs were:
2022
9,000,000
560,000
2021
Sales
5,000,000
200,000
Actual warranty repairs

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