Sheryl Crow Equipment Company sold 642 Rollomatics during 2014 at $6,460 each. D

Question

Sheryl Crow Equipment Company sold 642 Rollomatics during 2014 at $6,460 each. During 2014, Crow spent $52,250 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.

(a)

Account Titles and Explanation

Debit

Credit

(To record the sale)

(To record the warranty expense)

(To record the warranty liabilitiy)

Sheryl Crow Equipment Company sold 642 Rollomatics during 2014 at $6,460 each. During 2014, Crow spent $52,250 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.

Explanation / Answer

Journal entries

Description Debit Credit Cash $4,147,320 To Sales $4,147,320 Warratny expense $52,250 To Cash $52,250 Warranty expense $156,750 To Warranty liability $156,750

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