1) Farmers Tool Company sells lawn mowers with a 2-yearservice-type warranty. The warranty costs $99. On November 1, 2017,Farmers Tool Company sold 20 lawnmowers at $2,000 each. Tenwarranties were sold. On July 14, 2018, $500 is spent on warrantycosts. Prepare the journal entries related to the sale on November1st and for the warranty costs incurred on July 14th.
SHOW YOUR CALCULATIONS!!! Do not forget journal entrydescriptions.
2)
Diamond Corporation declared a cash dividend of $40,000 onDecember 1, 2017. Record the entry (if any) of this declaration. Donot forget journal entry descriptions.
3)
Victor Valentines offers a premium to its customers – glass rosevase (cost to Victor Valentines is $3 each) for the return of 10labels. Each box of chocolates sold contains a label. The companyestimates, based on past experience, that 65% of the labels will beredeemed. During 2018, one million boxes of chocolates were sold at$6 per box. During 2018, 350,000 labels were redeemed. VictorValentines purchased 50,000 glass rose vases on January 1,2018.
Prepare the journal entries for the sale of the boxedchocolates, the purchase of the premiums, the estimated premiumexpense, and the redemption of the labels. (15points)
