Hardin Widget Manufacturing Began Operations in January 2013

question 129

Essay

Hardin Widget Manufacturing began operations in January 2013. Hardin sells widgets that carry a two-year manufacturer's warranty against defects in workmanship. Hardin's management projects that 2% of the widgets will require repair during the first year of the warranty while approximately 6% will require repair during the second year of the warranty. The widgets sell for $400 each. The average cost to repair a widget is $50. The company sells 60% of the widgets to retail customers who must pay a 6% sales tax. Sales and warranty information for 2013 and 2014 are as follows:
2013: Sold 200 widgets on account; incurred warranty expenditures of $300.
2014: Sold 300 widgets on account; actual warranty expenditures were $500.
Required:
1. Prepare journal entries that summarize the sales and any aspects of the warranty for 2013.
2. Prepare journal entries that summarize the sales and any aspects of the warranty for 2014.

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Definitions:

Maternal Identification

The process by which a child incorporates aspects of their mother (or primary caretaker's) behaviors, attributes, or attitudes into their own developing personality.

Psychological Distress

A state of emotional suffering characterized by symptoms such as anxiety, depression, and stress, often as a reaction to life situations.

Identity Cohesion

The sense of unity, continuity, and integration of one’s identity across different aspects of self.

Identity Crisis

A phase of exploration and questioning about one's sense of self and place in the world, often associated with periods of transition or stress.