Business, 24.04.2020 22:35 elgallo8773

Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and It backs each notebook It sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $410,000. Actual warranty expenditures in January of the following year were $13,500.

1. Does this situation represent a contingent liability?

Yes

No

1. Record the contingent liabilities for warranties.

4. What is the balance in the warranty liability account after the entries in Part 2 and 3?

Warranty liability

Answers: 2

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Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook co...