Question

In: Accounting

Applebee sells speakers with a 6 month manufacturer’s warranty. At the time of purchase, customers also...

Applebee sells speakers with a 6 month manufacturer’s warranty. At the time of purchase, customers also have an opportunity to buy an extended 1 year warranty. In Year 1 Applebee sold $40,000 of speakers and $12,000 of extended warranties. All sales are credit sales and sales occurred evenly during the year. Applebee is a calendar year entity that records AJE’s and produces financial statements only at year-end.

Make a summary JE to record Year 1 sales.

Make the related AJE needed at the end of Year 1.

Please show all work for calculations. Thank you.   

Solutions

Expert Solution

Since the entity sales are even and they are preparing the financials at the end of the year so this is important that their P&L looks even also.

this means that every month should have same amount of sales as their sales are even.

So sales for the year is of $40000 this means if we divide $40,000 by 12 months we get 3333 as sales are even throughout the year.

Below JE are required to be passed at year end to show that sales are even

Jan

Customer A/C   DR.     3333

To Sales Account    CR.      3333

Feb

Customer A/C   DR.     3333

To Sales Account    CR.      3333

March

Customer A/C   DR.     3333

To Sales Account    CR.      3333

April

Customer A/C   DR.     3333

To Sales Account    CR.      3333

May

Customer A/C   DR.     3333

To Sales Account    CR.      3333

June

Customer A/C   DR.     3333

To Sales Account    CR.      3333

July

Customer A/C   DR.     3333

To Sales Account    CR.      3333

Aug

Customer A/C   DR.     3333

To Sales Account    CR.      3333

Sept

Customer A/C   DR.     3333

To Sales Account    CR.      3333

October

Customer A/C   DR.     3333

To Sales Account    CR.      3333

November

Customer A/C   DR.     3333

To Sales Account    CR.      3333

December

Customer A/C   DR.     3333

To Sales Account    CR.      3333

Since they have $12,000 in sale of warranties also, below Je's should also be passed.

Jan

Customer A/C   DR.     1000

To Sales Account    CR.      1000

Feb

Customer A/C   DR.     1000

To Sales Account    CR.      1000

March

Customer A/C   DR.     1000

To Sales Account    CR.      1000

April

Customer A/C   DR.     1000

To Sales Account    CR.      1000

May

Customer A/C   DR.     1000

To Sales Account    CR.      1000

June

Customer A/C   DR.     1000

To Sales Account    CR.      1000

July

Customer A/C   DR.     1000

To Sales Account    CR.      1000

Aug

Customer A/C   DR.     1000

To Sales Account    CR.      1000

Sept

Customer A/C   DR.     1000

To Sales Account    CR.      1000

October

Customer A/C   DR.     1000

To Sales Account    CR.      1000

November

Customer A/C   DR.     1000

To Sales Account    CR.      1000

December

Customer A/C   DR.     1000

To Sales Account    CR.      1000

ekkarill92 answered 9 months ago
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