A Company Sells Personal Computers for $2,300 Each

question 135

Essay

A company sells personal computers for $2,300 each. The price includes a two-year warranty. During the current year, the company sells 400 computers. On the basis of past experience, the warranty costs are estimated to be $250 per computer. 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:

Stereotype Threat

The risk of confirming negative stereotypes about an individual's racial, ethnic, gender, or cultural group, which can hinder their performance.

Institutional Discrimination

A systemic discrimination that occurs within institutions like schools, companies, and governments, where policies, practices, or procedures cause unequal treatment of particular groups.

Objectification Theory

A theory which proposes that the cultural value placed on women’s appearance leads people to view women more as objects than as full human beings.

Social Identity Theory

A psychological theory positing that a person's sense of who they are is based on their group memberships.