Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

تمرين 7

AEstimated warranty liability
Chloe Co. sold $300,000 of equipment during January under a one-year warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On June 20, a customer required a $90 part replacement, plus $42 of labor under the warranty.
Provide the journal entry for (a) the estimated warranty expense on January 31 for January sales, and (b) the June 20 warranty work.
BEstimated warranty liability
Quantas Industries sold $325,000 of consumer electronics during July under a nine-month warranty. The cost to repair defects under the warranty is estimated at 4.5% of the sales price. On November 11, a customer was given $220 cash under terms of the warranty.
Provide the journal entry for (a) the estimated warranty expense on July 31 for July sales, and (b) the November 11 cash payment.