Accounting Question Warranty

timer Asked: Apr 8th, 2015

Question description

Listed below are a few transactions and events of Maxum Company.


During December, Maxum Company sold 12,000 units of a product that carries a 60-day warranty. December sales for this product total $460,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $15.

Prepare any necessary adjusting entries at December 31, 2013, for Maxum Company’s year-end financial statements for each of the above separate transactions and events.

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