Kingbird Factory provides a 2-year warranty with one of its products which was first sold in 2025. Kingbird sold $932,300 of productssubject to the warranty. Kingbird expects $118,280 of warranty costs over the next 2 years. In that year, Kingbird spent $72,730servicing warranty claims. Prepare Kingbird's journal entry to record the sales (ignore cost of goods sold) and the December 31adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indentmanually. List all debit entries before credit entries.)DateDuring 202512/31/25Account Titles and Explanation(To record payment for warranty costs incurred)(To record sales)DebitCredit

Summary:-Journal entry is providedExplanation:

Answered: Kingbird Factory provides a 2-year…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.5P

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Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Assurance-Type Warranty Clean-All Inc. sells washing machines with a 3-year assurance-type warranty. In the past, Clean-All has found that in the year after sale, warranty costs have been 3% of sales; in the second year after sale, 5% of sales; and in the third year after sale, 7% of sales. The following data are also available: Required: 1. Prepare the journal entries for the preceding transactions for 20192021. Closing entries are not required. 2. What amount would Clean-All report as a liability on its December 31, 2021, balance sheet, assuming the liability had a balance of 88,200 on December 31, 2018? 3. Next Level How would the failure to recognize a contingent liability affect the financial statements?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Skysong Factory provides a 2-year warranty with one of its products which was first sold in 2025. Skysong sold $997,500 of products subject to the warranty. Skysong expects $120,250 of warranty costs over the next 2 years. In that year, Skysong spent $71,080 servicing warranty claims. Prepare Skysong's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date During 2025 12/31/25 Account Titles and Explanation (To record payment for warranty costs incurred) (To record sales) Debit Credit 1
Streep Factory provides a 2-year warranty with one of its products which was first sold in 2020. Streep sold $1,000,000 of products subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.
Ivanhoe Factory provides a 2-year warranty with one of its products which was first sold in 2020. Ivanhoe sold $909,800 of products subject to the warranty. Ivanhoe expects $124,480 of warranty costs over the next 2 years. In that year, Ivanhoe spent $73,090 servicing warranty claims. Prepare Ivanhoe's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date 2020 During 2020 12/31/20 Account Titles and Explanation (To record sales) (To record warranty claims) Debit Credit
Pearl Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pearl sold $1,010,100 of products subject to the warranty. Pearl expects $113,910 of warranty costs over the next 2 years. In that year, Pearl spent $63,100 servicing warranty claims. Prepare Pearl's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)
Pearl Factory provides a 2-year warranty with one of its products which was first sold in 2025. Pearl sold $1,077,700 of products subject to the warranty. Pearl expects $123,000 of warranty costs over the next 2 years. In that year, Pearl spent $63,400 servicing warranty claims. Prepare Pearl's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation During 2025 12/31/25 Warranty Liability Warranty Expense (To record payment for warranty costs incurred) Warranty Expense Inventory (To record sales) Warranty Expense Warranty Liability Debit 123000 63400 59600 Credit 123000 63400 59600
Windsor Factory provides a 2-year warranty with one of its products which was first sold in 2025. Windsor sold $940,900 of products subject to the warranty. Windsor expects $122,010 of warranty costs over the next 2 years. In that year, Windsor spent $74,460 servicing warranty claims. Prepare Windsor's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation During 2025 12/31/25 (To record payment for warranty costs incurred) (To record sales) Debit Credit ||||| [[[
Martinez Factory provides a 2-year warranty with one of its products which was first sold in 2025. Martinez sold $909,800 of products subject to the warranty. Martinez expects $124,480 of warranty costs over the next 2 years. In that year, Martinez spent $73,090 servicing warranty claims. Prepare Martinez's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically Indented when amount is entered. Do not Indent manually. List all debit entries before credit entries.) Date During 2025 12/31/25 Account Titles and Explanation (To record payment for warranty costs incurred) (To record sales) Debit Credit 20
Concord Factory provides a 2-year warranty with one of its products which was first sold in 2020. Concord sold $930,400 of products subject to the warranty. Concord expects $124,050 of warranty costs over the next 2 years. In that year, Concord spent $70,460 servicing warranty claims. Prepare Concord's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date 2020 During 2020 12/31/20 Account Titles and Explanation Cash Sales Revenue (To record sales) Warranty Expense Warranty Liability (To record warranty claims) Warranty Liability Cash Debit 930400 il 70460 124050 Credit 930400 lil 70460 124050
Sunnyvale Computer Company sells a line of computers that carry a six-month warranty. Customers are offered the opportunity to buy a two-year extended warranty for an additional charge. During 2024, Sunnyvale received $328,000 from customers for these extended warranties. All sales are on credit, and funds are received evenly throughout the year and the warranties go into effect immediately after purchase. Required: Prepare a summary journal entry to record sales of the extended warranties. Also prepare any other entries associated with the warranties that should be recorded during 2024. 1. Record the $328,000 sale of the extended warranties. 2.Record the recognition of revenue from extended warranties for the year ending December 31, 2024.

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