Question

problem 1 Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $312,000 for January. In February, a customer received warranty repairs requiring $330 of parts and $80 of labor.

For a compound transaction, if an amount box does not require an entry, leave it blank.

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.

b. Journalize the entry to record the warranty work provided in February.

	​problem 2 The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries $1,420,000 Social security tax withheld 85,200 Medicare tax withheld 21,300 Federal income tax withheld 284,000 In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $266,000 of salaries. Required: A. Journalize the entry to record the payroll for the week of April 29.* B. Journalize the entry to record the payroll tax expense incurred for the week of April 29.*

Answer 1

Problem 1

Part A

Date	account titles and explanation	debit	credit
January 31	product warranty expense	12480
	Product warranty payable (312000*4%)		12480
	To record warranty expense for January.

Part B

Date	account titles and explanation	debit	credit
February	product warranty payable	410
	Supplies		330
	Wages payable		80

Problem 2

Part A

Date	account titles and explanation	debit	credit
April 29	Salaries expense	1420000
	Social Security tax payable		85200
	Medicare tax payable		21300
	Employees federal income tax payable		284000
	Salaries payable (balancing figure)		1029500

Part B

Date	account titles and explanation	debit	credit
April 29	payroll tax expense	122460
	Social Security tax payable		85200
	Medicare tax payable		21300
	State unemployment taxes payable (266000*5.4%)		14364
	Federal unemployment taxes payable (266000*0.6%)		1596