Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Trail Runner ​USA a tire​ manufacturer guarantees its tires against defects for five years

Trail Runner ​USA a tire​ manufacturer guarantees its tires against defects for five years

Trail Runner ​USA, a tire​ manufacturer, guarantees its tires against defects for five years or​ 60,000 miles, whichever comes first. Suppose Trail Runner

USA can expect warranty costs during the​ five-year period to add up to 5 % of sales. Assume that a Trail Runner USA dealer in​Denver, Colorado, made sales of $474,000 during 2018. Trail Runner USA received cash for 30​% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $19,000 during 2018. Record the sales, warranty expense, and warranty payments for Trail Runner USA (Record debits first, then credits.)

First, record the sale of the tires.

Journal Entry

 

Accounts

Debit

Credit

         
         
         
         

​Now, accrue the warranty expense.

Journal Entry

 

Accounts

Debit

Credit

         
         
         
         

​Next, record the payment of warranty expenses.

Journal Entry

 

Accounts

Debit

Credit

         
         
         
         

2. Post to the Accrued Warranty Payable​ T-account. The beginning balance was

$ 17 comma 000$17,000.

At the end of 2018​, how much in accrued warranty payable does Trail Runner USA owe to its​ customers?

Select the appropriate​ descriptions, and enter the beginning balance and post the entries to the Accrued Warranty Payable​T-account. Calculate the balance of the liability account.

Accrued Warranty Payable

           
           
           

At the end of 2018, Trail Runner USA owes $

_______

to its customers from Accrued Warranty Payable.

Feb 06 2020 View more View Less

Answer (UnSolved)

question Get Solution

Related Questions