Question: apple sells a phone for 2000 they also offer a...
Apple sells a phone for $2,000, they also offer a four year warranty for $100 that ensures the phone would function correctly. in 2018, Apple sold 1700 phones and 875 warranties for cash. Apple estimates that the labor cost would be $60 over the four year warranty.
assume the 2018 sales happened at the end of december
record all entries for december 2018.
what liability would appear on the balance sheet for december 31st 2018 and what would it be classified.
in 2019, apple incurred actual costs of 18,000 related to the warranty contracts that were sold in 2018.
record the correct 2019 entries relating to the 2018 warranty contracts.
what liability would appear on the balance sheet for december 31st 2019 and what would it be classified.