On January 2, 2020, Pearl Company sells production equipment to Fargo Inc. for $52,000. Pearl includes a 2-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January 2, 2020. During 2020, Pearl incurs costs related to warranties of $940. At December 31, 2020, Pearl estimates that $660 of warranty costs will be incurred in the second year of the warranty. a. Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020 (assuming financial statements are prepared on December 31, 2020). b. Repeat the requirements for (a), assuming that in addition to the assurance warranty, Grando sold an extended warranty (service-type warranty) for an additional 2 years (2019-2020) for $800.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On January 2, 2020, Pearl Company sells production equipment to Fargo Inc. for $52,000. Pearl includes a 2-year assurance warranty service ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Max has set a goal to create an emergency fund. he determined that his monthly expenses total $1,525. based on recommendations, how much should max save for his emergency fund?
Answers (1)
Cullumber Company reported the following results for the year ended December 31, 2018, its first year of operations: 2018 Income (per books before income taxes) $2,049,000 Taxable income 3,250,000 The disparity between book income and taxable income
Answers (1)
Partners, LLC members and S Corporation shareholders are not taxed on the amount they withdraw from the entity in a nonliquidating distribution when they have sufficient basis (disregarding any other limitation). a. True b. False
Answers (1)
Just-in-time management could be best defined in which of the following ways? Select one of the options below as your answer. A. improving efficiency by raising wages B. increasing inventory for quality assurance C.
Answers (1)
Is the loss in efficiency due to market power large or small? explain. the loss in efficiency due to market power is?
Answers (1)
New Questions in Business
What is difficult about using cost-benefit analysis to estimate the level of a public good that will maximize social welfare? It is difficult to estimate the marginal costs of supplying a public good.
Answers (1)
Suppose the town of Boone has a total population of 50,000 people. Of those, 46,000 people are employed. There are 2,000 full-time students who are not employed or actively seeking work.
Answers (1)
Sadie sold 12 shares of stock to her brother, George, for $640 16 months ago. Sadie had purchased the stock for $880 two years earlier.
Answers (1)
The Fed regulates banks but has little authority over bank holding companies.
Answers (1)
Shared values among employees are the glue of successful management a. True b. False
Answers (1)