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Journal entries required to create and close warranty period

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Reference no: EM13502147

Spoiled Baby Corp (SPC) sells baby buggies.  Recent changes in the law required SPC to warranty its products for 90 days and you must set up the required accounts.  Historical Data indicates that 6% of monthly sales result in warranty claims.  The June 20x1 monthly sales are $481,000.

The following warranty claims were made against June sales.

July 8                               210                        July 14                            450

July 16                            900                        July 21                            385

July 26                            421                        July 28                            772

Aug 4                           1,795                        Aug 8                               921

Aug 14                            267                        Aug 17                         1,022           

Aug 25                            186                        Aug 27                            755

Aug 29                            548                        Aug 30                            899

Sept 2                              111                        Sept 3                              219

Sept 5                           1,135                        Sept 14                            816

Sept 18                            242                        Sept 24                            987

Sept 27                            147                        Sept 28                        1,587

Sept 29                            788                        Sept 30                            489

Oct 1                              1188                        Oct 8                              1387

Oct 14                              489                        Oct 17                              577

Oct 21                           1,967                        Oct 27                              927

Oct 28                              683                        Oct 29                              492

Oct 30                              897                        Oct 31                            1572

Prepare the Journal entries required to create and close the warranty period.

Reference no: EM13502147

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