The accounting records of Durango Ceramics included the following at December 31, 2007:

In the past, Durango's warranty expense has been \(6 \%\) of sales. During 2008 , Durango made sales of \(\$ 100,000\) and paid \(\$ 7,000\) to satisfy warranty claims.

Requirements 

1. Journalize Durango's warranty expense and warranty payments during 2008. Explanations are not required.

2. What balance of Estimated Warranty Payable will Durango report on its balance sheet at December 31, 2008? 

Transcribed Image Text:

Estimated Warranty Payable Balance 3,000