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Homework answers / question archive / Buffalos Appliances, a private family business, sells dishwashers for $1,250 each, which includes a 2-year warranty that requires the 148 company to perform periodic services and to replace defective parts

Buffalos Appliances, a private family business, sells dishwashers for $1,250 each, which includes a 2-year warranty that requires the 148 company to perform periodic services and to replace defective parts

Accounting

Buffalos Appliances, a private family business, sells dishwashers for $1,250 each, which includes a 2-year warranty that requires the 148 company to perform periodic services and to replace defective parts. During 2020, Buffalos sold 700 dishwashers on account. Based 149 on past experience, the company has estimated the total 2-year warranty costs per unit sold are at $24 for parts and $20 for labor. per 150 unit. (Assume sales all occur at December 31, 2020.) 151 152 In 2021, Buffalos incurred actual warranty costs related to 2020 dishwasher sales of $6,000 for parts and $9,500 for labor. 153 154 Instructions 153 a) Using the assurance (expense) warranty approach, provide all necessary entries to reflect the above transactions for 2020 and 156 2021. ((5 marks) 157 b) Using the cash approach, what are the warranty expense balances for 2020 and 201 and prepare the entries. (2 marks) 158 c) As the CFO of Buffalos, would you recommend using the cash approach? (1 marks) 159 160 161 Q4 Answers 162 163 164 165 166 167 168 Sheet1 questioni Sheet2 0.0

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