Consolidate Table Of Contents Warranty For Free

Click Data>Consolidate (in the Data Tools group). In the Function box, click the summary function that you want Excel to use to consolidate the data. The default function is SUM.

Warranties are recorded initially as a liability as it meets the definition of unearned revenue or deferred revenue. If the company charged $20 for a 2 warranty, that $20 would be collected at the time of sale. The warranty would then be recognized as revenue evenly over the 2 year period.

The key to proper revenue recognition for warranties is to first determine if the warranty provides a service to the customer beyond the required agreed-upon specifications. Next, the seller or company must allocate the price to both the product and separate warranty obligation based on standalone prices.

Accrue the warranty expense with a debit to the warranty expense account and a credit to the warranty liability account. As actual warranty claims are received, debit the warranty liability account and credit the inventory account for the cost of the replacement parts and products sent to customers.

Warranty expense is an expense related to the repair, replacement, or compensation to a user for any product defects.

Excel can automatically summarize or consolidate information from multiple worksheets into a single, master worksheet using the Consolidate feature. For example, if you have sales data for multiple sales agents on different worksheets, Excel can total them for you on another worksheet.

The key to proper revenue recognition for warranties is to first determine if the warranty provides a service to the customer beyond the required agreed-upon specifications. Next, the seller or company must allocate the price to both the product and separate warranty obligation based on standalone prices.