accounting 146 | assignmentcollections.com
accounting 146 | assignmentcollections.com
During August, Arena Company sells $349,000 in product that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a balance of $11,100 before adjustment. Customers returned product for warranty repairs during the month that used $7,700 in parts for repairs. The entry to record the estimated warranty expense for the month is: Debit Warranty Expense $17,450; credit Estimated Warranty Liability $17,450. Debit Estimated Warranty Liability $7,700; credit Warranty Expense $7,700. Debit Estimated Warranty Liability $17,450; credit Warranty Expense $17,450. Debit Warranty Expense $6,350; credit Estimated Warranty Liability $6,350. Debit Warranty Expense $14,050; credit Estimated Warranty Liability $14,050.
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