At the Beginning of 2016,McKee,Inc

question 35

Essay

At the beginning of 2016,McKee,Inc.had a balance in the Warranty Payable account of $15,600.During the year McKee sold for $650,000 several products that carried a two-year warranty.McKee estimated that warranty expense would be 3% of sales for the year.
a)Prepare McKee's year-end adjusting journal entry for warranty expense.
b)If McKee's incurred actual warranty cost is $12,500 during 2016,what is the balance in the Warranties Payable account after the adjusting entry is made?

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Definitions:

Domains

In biology, refers to the highest categorization in the classification of life, dividing organisms into three groups: Bacteria, Archaea, and Eukarya.

Bacteria

Single-celled microorganisms that can be found in various environments, some of which are beneficial while others can cause diseases.

Poaceae

A large and economically important family of plants, also known as the grass family, which includes species like wheat, corn, and rice.

Classification

The systematic arrangement of living organisms into hierarchical groups based on their characteristics and evolutionary history.