1. b) Labroy Marine adjusted its Provision for Warranties as at 31 March 2021 so that it would be equal to 6% of sales for the year ended on that date. Sales for the financial year ended 31 March 2021 were $625,000 and the Provision for Warranties before the adjustment was $32,000. On 15 May 2021, a successful claim for warranty on faulty products to the cost of $4,200 was made on Labroy Marine.

   Required:

   1. i) Prepare the general journal entry at 31 March 2021 to adjust the Provision

      for Warranties to the required level.

      (2 marks)

   2. ii) Record the payment of the warranty claim on 15 May 2021 in general journal format.

      (2 marks)

2. c) Discuss why control of receivables is just as important as control of cash. (3 marks)