Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 Sales RevenueCash, Accrued PayrollInventoryWarranty ExpenseWarranty LiabilityAccounts Receivable Sales RevenueAccounts ReceivableWarranty LiabilityWarranty ExpenseCash, Accrued PayrollInventory (To record sale of computers) 2020 Warranty LiabilityAccounts ReceivableCash, Accrued PayrollInventorySales RevenueWarranty Expense InventoryWarranty LiabilityCash, Accrued PayrollWarranty ExpenseAccounts ReceivableSales Revenue (To record liability against warranty costs) 2021 Warranty ExpenseWarranty LiabilityInventorySales RevenueCash, Accrued PayrollAccounts Receivable Sales RevenueInventoryWarranty ExpenseCash, Accrued PayrollWarranty LiabilityAccounts Receivable Warranty LiabilitySales RevenueInventoryCash, Accrued PayrollWarranty ExpenseAccounts Receivable 2) The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty ExpenseCash, Accrued PayrollSales RevenueWarranty LiabilityAccounts Receivable $

Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 Sales RevenueCash, Accrued PayrollInventoryWarranty ExpenseWarranty LiabilityAccounts Receivable Sales RevenueAccounts ReceivableWarranty LiabilityWarranty ExpenseCash, Accrued PayrollInventory (To record sale of computers) 2020 Warranty LiabilityAccounts ReceivableCash, Accrued PayrollInventorySales RevenueWarranty Expense InventoryWarranty LiabilityCash, Accrued PayrollWarranty ExpenseAccounts ReceivableSales Revenue (To record liability against warranty costs) 2021 Warranty ExpenseWarranty LiabilityInventorySales RevenueCash, Accrued PayrollAccounts Receivable Sales RevenueInventoryWarranty ExpenseCash, Accrued PayrollWarranty LiabilityAccounts Receivable Warranty LiabilitySales RevenueInventoryCash, Accrued PayrollWarranty ExpenseAccounts Receivable 2) The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet? Current Liabilities- Warranty ExpenseCash, Accrued PayrollSales RevenueWarranty LiabilityAccounts Receivable $

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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Question

Cullumber Equipment Company sells computers for $1,760 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 930 computers.

Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.)

In 2021, Cullumber incurred actual warranty costs relative to 2020 computer sales of $11,200 for parts and $16,800 for labor.

Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
2020	Sales RevenueCash, Accrued PayrollInventoryWarranty ExpenseWarranty LiabilityAccounts Receivable
	Sales RevenueAccounts ReceivableWarranty LiabilityWarranty ExpenseCash, Accrued PayrollInventory
	(To record sale of computers)
2020	Warranty LiabilityAccounts ReceivableCash, Accrued PayrollInventorySales RevenueWarranty Expense
	InventoryWarranty LiabilityCash, Accrued PayrollWarranty ExpenseAccounts ReceivableSales Revenue
	(To record liability against warranty costs)
2021	Warranty ExpenseWarranty LiabilityInventorySales RevenueCash, Accrued PayrollAccounts Receivable
	Sales RevenueInventoryWarranty ExpenseCash, Accrued PayrollWarranty LiabilityAccounts Receivable
	Warranty LiabilitySales RevenueInventoryCash, Accrued PayrollWarranty ExpenseAccounts Receivable

The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet?

Current Liabilities- Warranty ExpenseCash, Accrued PayrollSales RevenueWarranty LiabilityAccounts Receivable

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