Iggy Sales,Inc.offers warranties on all its electronic goods.Warranty expense is estimated at 3.5% of sales revenue.In 2017,Iggy had sales of $333,000.In the same year,Iggy replaced defective goods with merchandise inventory costing $8,750.Prepare the journal entry to record the replacement of defective goods.

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The Answer of Iggy Sales,Inc.offers warranties on all its electronic goods.Warranty expense is estimated at 3.5% of sales revenue.In 2017,Iggy had sales of $333,000.In the same year,Iggy replaced defective goods with merchandise inventory costing $8,750.Prepare the journal entry to record the replacement of defective goods.