Homework Quiz-1

Homework Quiz-1 - Name: Section: Homework Quiz1 1....

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Unformatted text preview: Name: Section: Homework Quiz1 1. Lafayette Company sells laptop computers for $1,800 cash each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2010, the company sold 1,000 computers. Based on past experience, the company has estimated the total 2- year warranty costs as $45 for parts and $40 for labor. (Assume sales all occur at December 31, 2010.) In 2011, Lafayette incurred actual warranty costs relative to 2010 computer sales of $32,000 for parts and $21,000 for labor. 1a. Using the expense warranty treatment, write the entries to reflect the above transactions (accrual method) for 2010 and 2011 in the table below. 1b. The transactions of part (a) create a current liability account with a balance in the December 31, 2010 balance sheet? Use the table below to identify the accounts and their amounts....
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Homework Quiz-1 - Name: Section: Homework Quiz1 1....

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