At the beginning of 2014, Orendi Designs, Inc. had a balance in the Warranty Payable account of $10,500. During the year, Orendi sold several products that carried a two-year warranty for $450,000. Orendi estimated that warranty expense would be 5% of sales for the year.
a) What is the amount of warranty expense for 2014?
b) If Marianne paid warranty costs of $23,000 during 2014, what is the balance in the Warranty Payable account after the adjusting entry is made?

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The Answer of At the beginning of 2014, Orendi Designs, Inc. had a balance in the Warranty Payable account of $10,500. During the year, Orendi sold several products that carried a two-year warranty for $450,000. Orendi estimated that warranty expense would be 5% of sales for the year.
a) What is the amount of warranty expense for 2014?
b) If Marianne paid warranty costs of $23,000 during 2014, what is the balance in the Warranty Payable account after the adjusting entry is made?

At the Beginning of 2014, Orendi Designs, Inc