Journal entries to record transactions and adjustments

Reference no: EM13154641

On October 29, 2008, Bram Co. began operations by purchasing razors for resale. Bram uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $16 and its retail selling price is $60 in both 2008 and 2009. The manufacturer has advised the company to expect warranty costs to equal 7% of dollar sales. The following transactions and events occurred.

2008

Nov. 11 Sold 75 razors for $4,500 cash.
30 Recognized warranty expense related to November sales with adjusting entry.
Dec. 9 Replaced 15 razors that were returned under the warranty.
16 Sold 210 razors for $12,600.
29 Replaced 30 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.

2009

Jan. 5 Sold 130 razors for $7,800 cash.
17 Replaced 35 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.

Required

1. Prepare journal entries to record these transactions and adjustments for 2008 and 2009.

2. How much warranty expense is reported for November 2008 and for December 2008?

3. How much warranty expense is reported for January 2009?

4. What is the balance of the Estimated Warranty Liability account as of December 31, 2008?

5. What is the balance of the Estimated Warranty Liability account as of January 31, 2009?

Reference no: EM13154641

Questions Cloud

Calculate the volume of this oxygen sample at stp : A sample of oxygen gas has a volume of 131 L at 25°C and a pressure of 0.982 atm. Calculate the volume of this oxygen sample at STP.

Which variable is the "dependent" variable : Does there appear to be a linear relationship between the screen size and the price?b. Which variable is the "dependent" variable?

Define density of vinegar is the same as water : The united states FDA requires that any product called vinegar contains at least 4% by weight of acetic acid. assuming that the density of vinegar is the same as water

How much of variation in calories explained by number fat : What is the coefficient of correlation? Is it significant at .01? How do you know? How much of the variation in calories can be explained by the number of fat grams per slice?

Journal entries to record transactions and adjustments : Prepare journal entries to record these transactions and adjustments for 2008 and 2009.

Calculate the ksp for the compound : At 25o C, the solubility of magnesium hydroxide Mg(OH)2 in water is 0.00429 grams per Liter. Calculate the Ksp for the compound. [NOTE that there are two moles of OH- per mole Mg(OH)2.]

Capital lease amortization and journal entries : Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The seven annual lease payments of $350,000 are made at the end of each year.

Journal entry-income tax expense-deferred income taxes : Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2010, assuming an income tax rate of 40% for all years.

Calculate the ka for the acid : A solution is made by dissolving 0.040 moles of the weak acid HA in water to make 1.00 L of a solution whose pH is 4.90. Calculate the Ka for the acid.

User Account

All Pages