Accrued Product Warranty

Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $339,000 for January. In February, a customer received warranty repairs requiring $285 of parts and $90 of labor.

Question Content Area

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. If an amount box does not require an entry, leave it blank.

	CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages PayableProduct Warranty Expense	Product Warranty Expense	Product Warranty Expense
	CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages PayableProduct Warranty Payable	Product Warranty Payable	Product Warranty Payable

Feedback Area

Feedback

The accrued product warranty amount is recorded in the same period in which the sale is recorded, therefore following the matching concept.

Question Content Area

b. Journalize the entry to record the warranty work provided in February. If an amount box does not require an entry, leave it blank.

	CashProduct Warranty ExpenseProduct Warranty PayableSuppliesWages PayableProduct Warranty Payable	Product Warranty Payable	Product Warranty Payable
	Accounts PayableAccounts ReceivableProduct Warranty ExpenseProduct Warranty PayableSuppliesSupplies	Supplies	Supplies
	Accounts ReceivableCashProduct Warranty ExpenseProduct Warranty PayableWages PayableWages Payable	Wages Payable	Wages Payable