Metro Sales, Inc. offers warranties on all its electronic goods. Warranty expense is estimated at 3.5% of sales revenue. In 2019, Metro had sales of $333,000. In the same year, Metro replaced defective goods with merchandise inventory costing $8,750. Prepare the journal entry to record the replacement of defective goods. Omit explanation.

Question

Quizplus · Accepted Answer

The Answer of Metro Sales, Inc. offers warranties on all its electronic goods. Warranty expense is estimated at 3.5% of sales revenue. In 2019, Metro had sales of $333,000. In the same year, Metro replaced defective goods with merchandise inventory costing $8,750. Prepare the journal entry to record the replacement of defective goods. Omit explanation.