General Motors provides a 3-year warranty on all the cars it sells. In 2022, GM...
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Accounting
General Motors provides a 3-year warranty on all the cars it sells. In 2022, GM sold 3 million cars. The average warranty cost per vehicle over the warranty period is estimated to be $150.
-What is the journal entry to record the warranty expense? When should it be reported?
-What distortion would occur in the financial statements if GM failed to record this expense?
- How should GM report the actual cost of providing the warranty service? (That is, what accounts should be debited or credited?)
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