Copy of ACCT 305 Live Lecture Excel Week 5

Copy of ACCT 305 Live Lecture Excel Week 5 - WARRANTY...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
WARRANTY LIABILITY FACTS Sales $12,000,000 Actual Warranty Expenditures $200,000 Warranty costs are expected to approximate 5% of sales REQUIREDJournal entries and ending warranty liability balance SOLUTION Journal entry to record sale: Debit Accounts Receivable  12,000,000  Credit Sales  12,000,000  Journal entry to estimate warranty liability: Debit Warranty Expense  600,000  Credit Warranty Liability  600,000  (12,000,000 x 5% = $600,000) Journal entry for actual expenditures: Debit Warranty Liability  200,000  Credit Cash/Wages Payable etc.  200,000  Ending balance in warranty liability: Warranty Liability Estimate  600,000  Actuals  (200,000) Ending Balance  400,000 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
PAYROLL LIABILITIES FACTS Salaries  500,000  Federal income taxes to be withheld  100,000  Federal unemployment tax rate 0.8% State unemployment tax rate (after FUT 5.4% Subtotal 6.2% Social Security (FICA) tax rate 7.65% Less: 6.2%
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

Copy of ACCT 305 Live Lecture Excel Week 5 - WARRANTY...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online