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6. A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date
6. A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date of sale. Warranty costs are estimated to be 2% of sales. During the month of June, the company performed warranty work and used $15,000 worth of parts to do the warranty work. Sales for June amounted to $560,000.
a. Calculate the warranty expense for the month of June.
b. If the Estimated Warranty Liability account had a credit balance of $28,000 on May 31, what is the account balance at June 30?
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