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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Definitions:

Health Care

A broad field that involves the maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people.

Caring

Exhibiting kindness and concern for others, often considered a fundamental aspect of human social interaction.

Orthopedic Unit

A specialized department within a hospital that focuses on the treatment of patients with musculoskeletal disorders.

Acute Care Hospital

A hospital that provides short-term treatment for patients facing severe health conditions, surgeries, or injuries.