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In the most recent year of operations, Bradley's Video Games sold merchandise costing $25,000 for $ 75,000. All merchandise was sold under a one-year warranty. At the time of sale, Bradley estimated that warranty claims would amount to 3% of sales. During the year, Bradley replaced defective merchandise for $1,290. All transactions were cash transactions.
Required:
a. Prepare journal entries to record all transactions related to the warranty.
b. Based solely on the above information, determine Bradley's operating income for the year.
Price
The monetary value anticipated, called for, or dispensed in return for something.
Total Revenue
The total amount of money received by a company for goods sold or services provided during a certain period.
Price
The amount of money required to purchase a good or service.
Elastic
Describing a situation where the quantity demanded or supplied of a product changes significantly in response to a change in price.
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