A Company Sells Its Product Subject to a Warranty That

question 46

Essay

A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date of sale. Warranty costs are estimated to be 6% of sales. During the month of June, the company performed warranty work and used $12,000 worth of parts for the warranty repairs. The total sales for June were equal to $450,000.
1. Record the warranty expense for the month of June.
2. Record the costs of the warranty work completed in June.
3. If the Estimated Warranty Liability account had a credit balance of $10,000 on May 31, what is the account balance at June 30?

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Definitions:

Polygyny

Refers to a form of polygamy where a man is allowed to have more than one wife at the same time.

European Economic System

Refers to the complex set of economies of European countries, often associated with the European Union's economic policies and mechanisms for fiscal stability and economic cooperation.

Slave Trade

The historical trading of enslaved Africans, primarily between the 16th and 19th centuries, to the Americas.

Slave Labor

The forced labor of individuals who are owned by others, without the right to refuse work or receive payment, historically practiced in various societies.