chiliboy8394
27.08.2020 •
Business
During August, Boxer Company sells $353,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 4% of the selling price. The warranty liability account has a credit balance of $11,500 before adjustment. Customers returned merchandise for warranty repairs during the month that used $8,100 in parts for repairs. The entry to record the estimated warranty expense for the month is: a) Debit Warranty Expense $10,720; credit Estimated Warranty Liability $10,720. b) Debit Estimated Warranty Liability $14,120; credit Warranty Expense $14,120. c) Debit Estimated Warranty Liability $8,100; credit Warranty Expense $8,100. d) Debit Warranty Expense $2,620; credit Estimated Warranty Liability $2,620.
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Ответ:
Debit warranty expense $14,120 ; Credit estimated warranty liability $14,120
Explanation:
Per the above information, the journal entry to record the customer warranty expense for the month is;
Warranty expense Dr. $14,120
To estimated warranty liability Cr. $14,120
The estimated liability is computed on credit sales for the year and the estimated percentage.
Given that;
Credit sales for the year = $353,000
Estimated percentage of credit sales = 4%
Therefore,
Estimated warranty liability
= $353,00 × 4%
= $14,120
Ответ:
She had to pay interest of $2,327 for the privilege of borrowing the principal of $18,000.
Explanation:
Banks make money by charging interest on loans.