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Question - Estimated Warranty Liability
Oven Roasted sold $199,000 of consumer electronics during July under a six-month warranty. The cost to repair defects under the warranty is estimated at 4% of the sales price. On November 10, a customer was given $207 cash under terms of the warranty.
(a) Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank.
(b) Provide the journal entry for the November 10 cash payment. If an amount box does not require an entry, leave it blank.
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