90.2K

Verified Solution

Link Copied!

[The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $7,500 ) for $15,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $131 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier: 1. How much warranty expense does the company report for this copier in Year 1 ? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1 ? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2 ? 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1 ; and (c) the repairs that occur on January 5 of Year 2. Complete this question by entering your answers in the tabs below. 1. How much warranty expense does the company report for this copier in Year 1 ? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1 ? 3. How much is the estimated warranty liability for this copler as of December 31 of Year 2 ? Journal entry worksheet 4 Record the sale of a copier for $15,000 cash. Note: Enter debits before credits. Journal entry worksheet Record the cost of goods sold of $7,500. Note: Enter debits before credits. Journal entry worksheet Record the estimated warranty expense at 4% of the sales. Note: Enter debits before credits. Journal entry worksheet Record the cost of repairs that occur on January 5 of Year 2. Note: Enter debits before credits

Answer & Explanation Solved by verified expert

See Answer