Shamrock Company sells a machine for $7,920 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 540 machines in 2025 (warranty expense is incurred half in 2025 and half in 2026). As a result of product testing, the company estimates that the total warranty cost is $334 per machine ($144 parts and $190 labor). Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts? Use "Inventory" account to record the parts portion of the warranty expense. (a) Sale of machinery and warranty expense incurred in 2025. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record sale) Debit Credit
Shamrock Company sells a machine for $7,920 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 540 machines in 2025 (warranty expense is incurred half in 2025 and half in 2026). As a result of product testing, the company estimates that the total warranty cost is $334 per machine ($144 parts and $190 labor). Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts? Use "Inventory" account to record the parts portion of the warranty expense. (a) Sale of machinery and warranty expense incurred in 2025. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record sale) Debit Credit
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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