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Accrued Product Warranty Logan Manufacturing Co. warrants its products for one year. The estimated product warranty...

Accrued Product Warranty

Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 5% of sales. Assume that sales were $409,000 for January. In February, a customer received warranty repairs requiring $150 of parts and $75 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 fill in the blank 7f8224f72026016_2 fill in the blank 7f8224f72026016_3
Product Warranty Payable fill in the blank 7f8224f72026016_5 fill in the blank 7f8224f72026016_6

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The accrued product warranty amount is recorded in the same period in which the sale is recorded, therefore following the matching concept.

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 fill in the blank f0e8380b3ffafcd_2 fill in the blank f0e8380b3ffafcd_3
Supplies fill in the blank f0e8380b3ffafcd_5 fill in the blank f0e8380b3ffafcd_6
Wages Payable fill in the blank f0e8380b3ffafcd_8 fill in the blank f0e8380b3ffafcd_9
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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.

Product Warranty Expense (409000*5%) 20450
Product Warranty Payable 20450

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 225
Supplies 150
Wages Payable 75
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