Answer Happy

Clean Corporation manufactures and sells dishwashers. Dean provides all customers with a two-year warranty guaranteeing to repair, free of charge, any defects reported during this time period. During the year, it seld 100,000 dishwashers for $325 each. Analysis of past warranty records indicates that 12% of all sales will be returned for repair within the warranty period. Clean expects to incur expenditures of $14 to repair each dishwasher. The account Estimated Liability for Warranties had a balance of $120,000 on January 1. Clean incurred $150,000 in actual expenditures during the year. Required: Prepare all journal entries necessary to record the events related to the warranty transactions during the year. During the year, it sold 100,000 dishwashers for $325 each. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Description Description $ Journal Description Debit Journal Debit ▾ Credit Journal Analysis of past warranty records indicates that 12% of all sales will be returned for repair within the warranty period. Clean expects to incur expenditures of $14 to repair each dishwasher. The account Estimated Liability for Warranties had a balance of $120,000 on January 1. How does this entry affect the accounting equation? Indicate the effect on financial staternent items by selecting for decreese (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Credit Assets Debit Credit Assets Balance Sheet Liabilities + Assets Balance Sheet Liabilities + Stockholders' Equity Balance Sheet Determine the adjusted ending balance in the Estimated Liability for Warranties account Stockholders Equity Revenues Clean incurred $150,000 in actual expenditures during the year. How does this entry affect the accounting equation? Indicate the effect on financial staternent items by selecting for decreese (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Stockholders = Liabilities + Equity Revenues Income Statement Expenses Revenues Income Statement Expenses Net Income Income Statement Expenses Net Income Net Income