3. Steel Manufacturing began operations in January 2024. Steel sells computers that carry a two-...
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3. Steel Manufacturing began operations in January 2024. Steel sells computers that carry a two- year manufacturer's warranty against defects in workmanship. Steel's management projects that 5% of the computers will require repair during the first year of the warranty while approximately 3% will require repair during the second year of the warranty. The computers sell for $1,600 each. The average cost to repair a computer is $300. The company sells the computers to retail customers who must pay a 7% sales tax. Sales and warranty information for 2024 and 2025 are as follows: 2024: Sold 2,000 computers on account; incurred warranty expenditures of $36,000. 2025: Sold 3,000 computers on account; incurred warranty expenditures of $60,000. Required: a. Prepare journal entries that summarize the sales and all aspects of the warranty for 2024 . b. Prepare journal entries that summarize the sales and all aspects of the warranty for 2025
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3. Steel Manufacturing began operations in January 2024. Steel sells computers that carry a two- year manufacturer's warranty against defects in workmanship. Steel's management projects that 5% of the computers will require repair during the first year of the warranty while approximately 3% will require repair during the second year of the warranty. The computers sell for $1,600 each. The average cost to repair a computer is $300. The company sells the computers to retail customers who must pay a 7% sales tax. Sales and warranty information for 2024 and 2025 are as follows: 2024: Sold 2,000 computers on account; incurred warranty expenditures of $36,000. 2025: Sold 3,000 computers on account; incurred warranty expenditures of $60,000. Required: a. Prepare journal entries that summarize the sales and all aspects of the warranty for 2024 . b. Prepare journal entries that summarize the sales and all aspects of the warranty for 2025 