Warranty: It is an agreement made by the company to provide guarantee against the defects in the products. To Journalize : Adjusting entry to record estimated warranty expense at January 31.

Question

Accrued product warranty Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 5% of sales. Assume that sales were $359,000 for January. On February 7, a customer received warranty repairs requiring $240 of parts and $80 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank. 000 000

Answer 1

Question

Chapter 10, Problem 10.22EX

A.

To determine

Warranty: It is an agreement made by the company to provide guarantee against the defects in the products.

To Journalize: Adjusting entry to record estimated warranty expense at January 31.

B.

To determine

To Journalize: Warranty work provided in February.

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