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:

Majority Group

A social group that controls the majority of economic, political, and social resources, often exerting power over minority groups.

Household Responsibilities

Tasks and activities associated with managing and maintaining a home, such as cleaning, cooking, and managing finances.

Self-Disclosure

The act of revealing personal, private, or sensitive information about oneself to others, facilitating greater intimacy and trust in relationships.

Relational Aggression

Nonphysical acts aimed at harming a person’s connections with others, such as by exclusion and rumor spreading.