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Question - Applebee sells speakers with a 6 month manufacturer's warranty. At the time of purchase, customers also have an opportunity to buy an extended 1 year warranty. In Year 1 Applebee sold $40,000 of speakers and $12,000 of extended warranties. All sales are credit sales and sales occurred evenly during the year. Applebee is a calendar year entity that records AJE's and produces financial statements only at year-end.
Make a summary JE to record Year 1 sales.
Make the related AJE needed at the end of Year 1.
Please show all work for calculations. Thank you.
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