Betancourt Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on...
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Betancourt Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Betancourt estimates that 3% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $15. The units sold and units defective that occurred during the last 2 months of 2017 are as follows.
Prepare the journal entries to record the estimated liability for warranties and the costs incurred in honoring 1,299 warranty claims. (Assume actual costs of $19,485.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Determine the estimated warranty liability at December 31 for the units sold in November and December
Estimated warranty liability:
Give the entry to record the honoring of 500 warranty contracts in January at an average cost of $15. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
please answer all incorrect questions and calculations thank you.
Month November December Units Sold 39,200 41,200 Units Defective Prior to December 31 784 515
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