journal entries for arrant liabilities and subsequent expenditures kingspeed bikes o 4238056
Journal entries for arrant liabilities and subsequent expenditures. Kingspeed Bikes offers three-year warranties against defects on the sales of its high-end racing bikes. The firm estimates that the total cost of warranty claims over the three-year warranty period on bikes sold in 2008 will equal 6% of sales revenue in 2008. Kingspeed will incur actual warranty costs over the three-year period following the time of sale. Sales (all for cash) and actual warranty costs incurred on bikes under warranty (60% in cash and 40% in parts) appear next for wars 2008 2010:(a) Prepare journal entries for the events of 2008, 2009, and 2010. Closing entries are not required.(b) What is the balance in Warranty Liability account at the end of2010?
Journal entries for arrant liabilities and subsequent expenditur