Excom manufactures high-end whole home electronic systems. The company provides a two-year warranty for all products...

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Accounting

Excom manufactures high-end whole home electronic systems. Thecompany provides a two-year warranty for all products sold. Thecompany estimates that the warranty cost is $225 per unit sold andreported a liability for estimated warranty costs $10.8 million atthe beginning of this year. During the current year, the companysold 60,000 units, costing $180 million, for a total of $243million on account. It also paid warranty claims of $9,000,000 oncurrent and prior year sales. 1. Prepare the (aggregate) journalentry to record the sale of the 60,000 units. 2. Prepare the(aggregate) journal entry to record the payment of warranty claims.3. Prepare the adjusting journal entry associated with warranties.4. What is the balance in the warranty liability account on theyear-end balance sheet?

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Working Notes CALCULATION OF THE WARRANTY EXPENSES FOR THE YEAR Sales of the year 60000 Units Estimated warranty Liability Per Unit 225 Estimated Warranty Liability of the year 60000 X See Answer

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