The folowing informaton appiles to the questons displayed below Computer Wholesa

Question

The folowing informaton appiles to the questons displayed below Computer Wholesalers restores and resells natebook computers. lt originsally acquires the notebook computers from corporations upgrading their computer systems, and it backs cach notebook it sells with a 90 day warranty against defects. Based on previous experience o puter wholesalers expects wa anty costs to e approximately 6% o s es Sa es or he onth o December are 440,000. Actu w r anty expenditures n January of the follo ing year were 15 000 value: Required Information 13.16 points 2. & 3. Record the necessary entries in the Joumal Entry Worksheet below. (lf no entry is required for a transactionlevent, select "No journal entry required" in the first account fleld.) Journal entry worksheet Record the contingent liability for warranties. Note: Enter debits before credits General Jou Debit Record entry View general journal Clear entry

Explanation / Answer

Answer to Part 1: Record of contingent liability for warranties.

Item General Journal Debit Credit 1 Warranty expenses 26400 warranty Liability (440000*6/100) 26400 Being record of contingent liability for warranties.

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