Southwest Company's Records Indicate That February Sales on Account Were $$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

question 84

Essay

Southwest Company's records indicate that February sales on account were $111,000.The company's management estimates the liability for warranties to be 4.0% of sales.Please provide the journal entry to record warranty expense.
$$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

---

Definitions:

Minimum Return on Investment

The lowest acceptable return on an investment, below which investments are considered unprofitable or not worth pursuing.

Profit Margin

A financial metric used to evaluate a company's financial health by revealing the percentage of revenue that exceeds the costs involved in making sales.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit from the investment divided by its cost.

Residual Income

The amount of income that an individual has after all personal debts and expenses have been paid.