Booker Company Reported Sales Revenue for 2013 of $800,000

question 80

Multiple Choice

Booker Company reported sales revenue for 2013 of $800,000.The products were sold with a six-month warranty.Members of Booker's management estimate the cost of the warranty will be equal to 3% of sales revenue.Which of the following is included in the entry to record the actual amounts paid out as a result of warranty claims?

• A) A debit to Estimated warranty payable for the actual amount of payments
• B) A credit to Estimated warranty payable for $24,000
• C) A debit to Estimated warranty payable for $24,000
• D) A debit to Warranty expense for the actual amount of payments