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3 [10 points) Benson Inc. extends a lifetime warranty on all radios sold. Using past experience, the company estimates that 3% of radios sold will
3 [10 points) Benson Inc. extends a lifetime warranty on all radios sold. Using past experience, the company estimates that 3% of radios sold will be returned and replaced at an average cost of $19 per radio. On January 1, 2014, the balance in Benson Inc.'s Estimated Warranty Liability account was $6,000 During 2014, sales totalled $540,500 or 11,500 radios. The actual number of radios retumed and replaced was 321 (1) Prepare the following journal entries Estimated warranty liabilities for units sold during 2014. Use the date December 31. Replacement of the units returned in 2014 (use the date December 31). Enter an appropriate description, and enter the dates in the format dd/mmm (lo. 15/Jan), General Journal Pago GUT Dato Account/Explanation F Debit Credit + (2) Calculate the balance in the Estimated Warranty Liability account at December 31, 2014, and the Warranty Expense that will appear on the income statement for the year-ended December 31, 2014 Balance of Estimated Warranty Liability at Dec 31? Warranty Expense as it appears on the Income Statement
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