Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 2% of sales.

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Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 2% of sales. Assume that sales were $1,800,000 for January. On February 7, a customer received warranty repairs requiring $375 of parts and $140 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.
b. Journalize the entry to record the warranty work provided in February.

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Financial And Managerial Accounting

ISBN: 9780357714041

16th Edition

Authors: Carl S. Warren, Jefferson P. Jones, William Tayler

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