Warranties}

Merleau Entertainment sells televisions and other sound and video equipment. Sales and expected warranty claims for the year are as follows:

\section*{Required:}
1. Prepare the entry to record warranty expense for Merleau Entertainment for the year.
2. CONCEPTUAL CONNECTION Why does Merleau have to record a liability for future warranty claims?
OBJECTIVE 6 \section*{Exercise

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Item Unit Sales Televisions 2,500 DVDs 360 Speakers 700 Expected Warranty Claims for Warranty Period 2 claims per 100 sold 5 claims per 100 sold 1 claim per 100 sold Cost per Claim $45 15 25