Kimbo Corporation sold 500 widgets during 2020 at a total price of $1.4M, with a...
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Kimbo Corporation sold 500 widgets during 2020 at a total price of $1.4M, with a warranty guarantee that the widgets were free from any defects. The cost of the widgets sold is $600,000. The term of the assurance warranty is one year, with an estimated cost of $10,000. What are the journal entries that Kimbo Corporation would make relating to the sale of the widgets and their warranty?
Question 14 options:
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| Dr: Cash 140,000 / Cr: Sales 140,000 / Cr: Warranty liability 10,000 |
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| Dr: Cash 150,000 / Cr: Sales 140,000 / Cr: Warranty liability 10,000 |
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| None of the above |
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| Dr: Cash 130,000 / Dr: Warranty liability 10,000 / Cr: Sales 140,000 |
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| Dr: Cash 140,000 / Cr: Sales 130,000 / Cr: Warranty Liability 10,000 |
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