Business, 25.12.2019 05:31, arianaw6735
Computer wholesalers restores and resells notebook computers. it originally acquires the notebook computers from
corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against
defects. based on previous experience, computer wholesalers expects warranty costs to be approximately 6% of sales.
sales for the month of december are $600,000. actual warranty expenditures in january of the following year were
$13,000.
required:
1, does this situation represent a contingent liability? why or why not?
2 record warranty expense and warranty liability for the month of december based on 6% of sales.
3. record the payment of the actual warranty expenditures of $13.000 in january of the following year.
4. what is the balance in the warranty liability account after the entries in requirements 2 and 3?
Answers: 3
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Computer wholesalers restores and resells notebook computers. it originally acquires the notebook co...
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