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Journal entry On 30 April 20X2, Neuman Ltd. sells a product to a customer for...

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Accounting

Journal entry

On 30 April 20X2, Neuman Ltd. sells a product to a customer for $636,000. The product carries a one-year assurance warranty. Neuman management estimates that the probable cost of fulfilling the warranty will be $53,000. Between 1 May and 31 December 20X2, the actual warranty cost was $21,200. On 31 December 20X2, management decides that the probable additional warranty cost will be no more than $13,900. Between 1 January and 30 April 20X3, the additional cost was $11,900 Assume the warranty now includes service and is sold separately with a stand-alone value of $81,000. The product has a stand-alone value of $626,500 and the total contract is $636,000. Prepare the relevant journal entries for 30 April 20X2 through 30 April 20X3.

the following journal entries need to be made

1. Record the sale, with deferral for warranty (Assume credit sales).

2.Record the costs incurred.

3. Record the amortization of deferred revenue. on 31 december 20X2

4.Record the amortization of deferred revenue on 30 april 20X3

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