Monthly sales are $530,000. Warranty costs are estimated at 6% of monthly sales. Warranties are honored with replacement products. No defective products are returned during the month. At the end of the month, the company should record a journal entry with a credit to:
A) Estimated Warranty Payable for $31,800.
B) Warranty Expense for $31,800.
C) Sales for $31,800.
D) Inventory for $31,800.
Correct Answer:
Verified
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