Sandra Sikes Sells Exercise Machines for Home Use

question 155

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 2014, 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 warranty expense for the year.

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Definitions:

Cartilage

A flexible, connective tissue found in various parts of the body, including joints, ear structure, and nose, providing support and cushioning.

Static Stretching

A form of stretching exercises in which individuals extend their muscles to the fullest length and hold the position for several seconds or longer to increase flexibility.

Ballistic Stretching

A method of stretching that involves quick, bouncing movements to push the body parts beyond their usual range of motion, increasing flexibility.

Dynamic Stretching

Stretching exercises that involve movement and are used to improve flexibility and warm up the muscles before exercise.