A Company Sells Its Product Subject to a Warranty That

question 154

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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