The Chair Company provides a 120-day parts-and-labor warranty on all merchandise

Question

The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,350. During the period, a customer returned a product that cost $1,013 to repair.

Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase, a ? for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA).

ported From Edge Saved Help Save & Exit Submit 2 Check my work CHAIR COMPANY Horizontal Statements Model Balance Sheet Income Statement AssetsLiabilitiesStockholder's Statement of Cash Flow | + | Equity Revenue-Expense = Net Income Estimates ed Paid ces

Explanation / Answer

Event Assets Liabilities Stockholders' equity Revenue Expense Net income Statement of cash flows Estimates 1350 -1350 1350 -1350 NA Paid -1013 -1013 -1013 OA

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