The Following Information Is Available for a Retail Store for the Month

question 93

Essay

The following information is available for a retail store for the month of February:
1.Wahlberg Computers sells computers for $2,500 each on account.On February 1,Wahlberg sold 20 computers.The cost of each computer sold was $1,000.The store uses the perpetual inventory system.
2.It is estimated that the warranty expense is 5% of gross sales.A journal entry is prepared February 1.
3.During February,Wahlberg replaced two computers due to product warranty complaints for products purchased in a prior month.
4.A customer fell in the store and is seeking $100,000 in damages.Wahlberg's attorney believes the case is frivolous because the customer has similar lawsuits pending against other retail stores.
5.A customer is suing Wahlberg Computers for $100,000 because the customer's computer purchased from Wahlberg Computers started a fire and destroyed the customer's residence.Wahlberg's attorney believes the customer will probably win the case and receive $100,000.
Required: Prepare the journal entries to record the transactions above.Omit explanations.

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Definitions:

Encourage

means to inspire with courage, spirit, or confidence, motivating someone to take a desired action or continue doing something.

Interviewee

A person who answers questions during an interview, often for a job position, research study, or media publication.

Compassionate Leave

Time off granted to employees due to a family emergency, bereavement, or other significant personal issues, acknowledging their need for time to cope.

Major Client Meeting

A significant gathering between service providers or sellers and their key clients to discuss business matters, progress, or negotiation.