E13-10B (Warranties) Incaviglia Company sold 400 copy-making machines in 2014 for $3,000 apiece, together with a one-year warranty. Maintenance on each machine during the warranty period averages $330. 2 • Chapter 13 Current Liabilities and Contingencies

E13-10B (Warranties) Incaviglia Company sold 400 copy-making machines in 2014 for $3,000 apiece, together with a one-year warranty. Maintenance on each machine during the warranty period averages $330.

Instructions

(a) Prepare entries to record the sale of the copiers and the related warranty costs, assuming that the accrual method is used. Actual warranty costs incurred in 2014 were $24,000.

(b) On the basis of the data above, prepare the appropriate entries, assuming that the cash basis method is used.