Ex: 5 A during the six months a During the month of July, the company performed

Question

Ex: 5 A during the six months a During the month of July, the company performed war perform the warranty work. Sales for July were $450,000. 1. Record the warranty expense for the month of July. 2. Record the costs of the warranty work completed in June. company sells its product subject to a warranty that covers the cost of parts for rds fter the date of sale. Warranty costs are estimated to be 5% of sales ranty work and used $11,000 of parts to 3. If t is the account balance at July 31? he Estimated Warranty Liability account had a credit balance of $10,000 on May 31, what

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit 1 Warranty Expenses (5% of $ 450,000) $                  22,500        To Accrued Warranty Liability $                     22,500 (To Record the Expenses of warratny) Accrued Warranty Liability $                  11,000 2         To Cash $                     11,000 (To Record the warranty Expenses) Answer =3 Opening Warranty Expenses = $                  10,000 Add: Provision of the warranty for the month = $                  22,500 Less : Expenses against the warranty provison $                 -11,000 Total $                  21,500 Answer = Balance in Warranty Expenses = $ 21,500

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