Please answer fast thank you Problem 3-3 (IAA)In 2020, Plumpton Company started selling new computerthat carried a 2-year warranty against defects.Based on the manufacturer's recommendations, the entityestimated warranty cost as a percentage of sales.3%First year of warrantySecond year ofwarranty9%Sales and actual warranty repairs are as follows:202020215,000,000100,0007,000,000250,000SalesActual warranty repairsRequired:1. Prepare journal entries to record the transactions for 2020and 2021.2. Analyze the estimated warranty liability account onDecember 31, 2021 to ascertain if the actual repairsapproximate the estimate. The sales and repairs occurevenly throughout the year.3. Prepare the adjustment of the estimated warrantyliability on December 31, 2021.

Warranty expenses are the expenses which are incurred due to the fact that company provides…

Required: 1. Prepare journal entries to record the transactions for 2020 and 2021. 2. Analyze the estimated warranty liability account on December 31, 2021 to ascertain if the actual repairs approximate the estimate. The sales and repairs occur evenly throughout the year. 3. Prepare the adjustment of the estimated warranty liability on December 31, 2021.

Required: 1. Prepare journal entries to record the transactions for 2020 and 2021. 2. Analyze the estimated warranty liability account on December 31, 2021 to ascertain if the actual repairs approximate the estimate. The sales and repairs occur evenly throughout the year. 3. Prepare the adjustment of the estimated warranty liability on December 31, 2021.

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 31CE

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