A Company Sells Sofas with a 6-Month Warranty

question 86

Essay

A company sells sofas with a 6-month warranty.In January,the company sold 100,000 sofas at $1,750 each;and 500 sofas needed repairs during that same month.The total repairs amounted to $85,000 costs from the upholstery materials inventory.It is estimated that 2% of all units sold will need repairs under warranty at an estimated cost of $200 per unit.Prepare the journal entries to record (a)estimated warranty expense for January and (b)warranty repair costs for January.

---

Definitions:

Mode Indicator

A feature on devices or software that displays the current operational mode.

AutoSum Button

A feature in spreadsheet software that quickly calculates the total sum of a selected range of cells.

Argument

A reason or set of reasons given with the aim of persuading others that an action or idea is right or wrong.

Formula Prefix

A symbol or set of symbols at the beginning of a formula that defines the formula's function or operation.