Question

2. 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 4% of sales. During the month of April, the company performed warranty work that used $10,500 worth of parts and $14,400 of technician labor for the warranty repairs. The total sales for April were equal to $480,000. (25 Points)
1. Record the warranty expense for the month of April.
2. Record the costs of the warranty work completed in April.
3. If the Estimated Warranty Liability account had a credit balance of $12,000 on March 31, what is the account balance at April 30?

Answer:

1.

2.

3. April 30^th balance is:

Please explain how you calculated the answer, thank you.

Answer 1