Question

Accrued Product Warranty Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 5% of sales. Assume that sales were $396,000 for January. In February, a customer received warranty repairs requiring $165 of parts and $70 of labor. a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank.

Product Warranty Expense______ _________

Product Warranty Payable ______ _________

b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank.

Product Warranty Payable ______ ______

Supplies fill in the blank _______ ______

Wages Payable ________ ______

Answer 1

A):. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. If an amount box does not require an entry, leave it blank.

Account titles	Debit	Credit
Product Warranty Expense	$19,800
Product Warranty Payable		$19,800
($396,000*5℅)

b):-Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank.

Account titles	Debit	Credit
Product Warranty Payables.	$235.
Supplies		$165.
Wages payable		$70