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Warranties-Assurance-Type and Cash Basis
Cleroux Corporation sold 150 colour laser copiers in 2017 for $4000 each, including a one- year warranty. Maintenance on each machine during the warranty period averages $300. Instructors
Problem 1. Prepare entries to record the machine sales and the related warranty costs under the expense approach. Actual warranty costs incurred in 2017 were $17 000.
Problem 2. Based on the information above and assuming that the cash basis is used, prepare the appropriate entries.
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