Jumbo Sales Corporation Offers Warranties on All Their Electronic Goods

question 74

Multiple Choice

Jumbo Sales Corporation offers warranties on all their electronic goods.Warranty expense is estimated at 3% of sales revenue.In 2017,the company had $610,000 of sales.In the same year,it paid out $9,000 of warranty payments.Which of the following is the entry needed to record the estimated warranty expense?

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Definitions:

Employee Benefit

Non-wage compensation provided to employees, which may include health insurance, retirement plans, and paid vacation.

Wages

Payments made by employers to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Salaries

Regular payments made by an employer to an employee, typically monthly, for the professional services the employee provides.

Public Policy Exception

A legal principle allowing courts to refuse to enforce a contract or clause if it would result in a violation of the public policy of the jurisdiction.