A Company Sells Tablet Computers for $1,300 Each

question 107

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 repair 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:

Individual Initiative

The action taken by a person to begin or to follow through with a plan or task without the need for others' encouragement or instruction, often leading to innovation and problem-solving.

Personality Theorists

Researchers or scholars who study or develop theories about the characteristics that make a person unique.

Range

The difference between the highest and lowest values in a set of numbers, indicating the spread or variation within the data.

Heredity

The biological process through which genetic traits are transmitted from parents to their offspring.