Sandra Sikes Sells Exercise Machines for Home Use

question 34

Essay

Sandra Sikes sells exercise machines for home use. The machines carry a 2-year warranty. Past experience indicates that 5% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is $40 for labor and $50 for parts per unit. During 2018, 3,000 exercise machines were sold at an average price of $800. During the year, 95 of the machines that were sold were repaired at the average price per unit.
Instructions
(a) Prepare the journal entry to record the repairs made under warranty.
(b) Prepare the journal entry to record the estimated warranty expense for the year.

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Definitions:

Different Particles

Various fundamental or composite units of matter that constitute the universe, such as electrons, protons, and neutrons.

Mobile Phase

In chromatography, the solvent that carries the sample through the stationary phase, allowing components to be separated.

Thin Layer Chromatography

An analytical technique used to separate and identify compounds in a mixture by distributing them between a stationary phase and a mobile phase.

Solid Coating

A layer of solid material applied to a surface for protection, decoration, or functional purposes.