Estimated Warranty Liability Cook-Rite Co. sold $541,000 of equipment during January under a one-year warranty. The...

Estimated Warranty Liability

Cook-Rite Co. sold $541,000 of equipment during January under a one-year warranty. The cost to repair defects under the warranty is estimated at 6% of the sales price. On August 15, a customer required a $348 part replacement, plus $174 of labor under the warranty.

Required:

(a) Provide the journal entry for the estimated warranty expense on January 31 for January sales.

Jan. 31	Product Warranty Expense
	Product Warranty Payable

(b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank.

Aug. 15

Expert Solution

Date	Account titles and Explanation	Debit ($)	Credit ($)

Jan. 31	Product Warranty Expense(541,000*6%)	32,460
	Product Warranty Payable		32,460
	( To record the estimated warranty expense)

Aug. 15	Estimated warranty liability	522
	Supplies		348
	Wages payable		174
	( To record Warranty Claims by customer)

ekkarill92 answered 2 months ago

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