qs 11-13 (algo) recording warranty repairs lo p4\non december 1, home store sells a mower (that costs $310)…

qs 11-13 (algo) recording warranty repairs lo p4\non december 1, home store sells a mower (that costs $310) for $610 cash with a one - year warranty that covers parts. warranty expense is estimated at 9% of sales. on january 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $43 in materials taken from the parts inventory.\nprepare the december 1 entry to record the mower sale (and cost of sale), the december 31 adjusting entry for estimated warranty liability, and the january 24 entry to record the warranty repairs.\nnote: round your answers to 2 decimal places.\nview transaction list\njournal entry worksheet\n< 1 2 3 4\nrecord the mower sales.\nnote: enter debits before credits.\n| date | general journal | debit | credit |\n| december 01 | cash | 610.00 |\n| | sales | | 610.00 |

qs 11-13 (algo) recording warranty repairs lo p4\non december 1, home store sells a mower (that costs $310) for $610 cash with a one - year warranty that covers parts. warranty expense is estimated at 9% of sales. on january 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $43 in materials taken from the parts inventory.\nprepare the december 1 entry to record the mower sale (and cost of sale), the december 31 adjusting entry for estimated warranty liability, and the january 24 entry to record the warranty repairs.\nnote: round your answers to 2 decimal places.\nview transaction list\njournal entry worksheet\n< 1 2 3 4\nrecord the mower sales.\nnote: enter debits before credits.\n| date | general journal | debit | credit |\n| december 01 | cash | 610.00 |\n| | sales | | 610.00 |

Answer

Explanation:

Step1: Record mower sale and cost of sale on Dec 1

Debit Cash for the amount received ($610), credit Sales for the selling - price ($610), debit Cost of Goods Sold for the cost of the mower ($310), and credit Inventory for the cost of the mower ($310).

Date General Journal Debit Credit
December 01 Cash 610.00
Sales 610.00
Cost of Goods Sold 310.00
Inventory 310.00

Step2: Calculate and record estimated warranty liability on Dec 31

Estimated warranty liability is 9% of sales. So, $610\times0.09 = 54.90$. Debit Warranty Expense and credit Estimated Warranty Liability.

Date General Journal Debit Credit
December 31 Warranty Expense 54.90
Estimated Warranty Liability 54.90

Step3: Record warranty repairs on Jan 24

Debit Estimated Warranty Liability for the cost of materials used in repairs ($43) and credit Parts Inventory for $43.

Date General Journal Debit Credit
January 24 Estimated Warranty Liability 43.00
Parts Inventory 43.00

Answer:

Date General Journal Debit Credit
December 01 Cash 610.00
Sales 610.00
Cost of Goods Sold 310.00
Inventory 310.00
December 31 Warranty Expense 54.90
Estimated Warranty Liability 54.90
January 24 Estimated Warranty Liability 43.00
Parts Inventory 43.00