Indigo Factory provides a 2-year warranty with one of its products which was first sold in 2025. Indigo sold $951,800 of products subject to the warranty. Indigo expects $121,810 of warranty costs over the next 2 years. In that year, Indigo spent $67,160 servicing warranty claims. Prepare Indigo's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

Indigo Factory provides a 2-year warranty with one of its products which was first sold in 2025. Indigo sold $951,800 of products subject to the warranty. Indigo expects $121,810 of warranty costs over the next 2 years. In that year, Indigo spent $67,160 servicing warranty claims. Prepare Indigo's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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