A Company Sells Tablet Computers for $1,300 Each

question 95

Essay

A company sells tablet computers for $1,300 each.The price includes a two-year warranty.During the current year,the company sells 400 tablets.On the basis of past experience,the warranty costs are estimated to be $280 per tablet.The actual warranty costs (paid in cash)by the company during the current year were $65,000.Prepare general journal entries to record the (a)estimated warranty expense and (b)warranty repair costs during current year.

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Definitions:

Smashed

To break something into pieces suddenly, noisily, and violently; shattered.

Broken Glass

Fragmented pieces of glass often resulting from breakage, which can pose a safety hazard.

Source Amnesia

The inability to remember where, when or how previously learned information has been acquired, while retaining the factual knowledge.

False Recollection

The misremembering or distortion of a memory, often with high confidence in the inaccurate details.