Calculate, and prepare a journal entry to record, the estimated liability for product warranties at December 31. Assume that warranty costs of known failures have already been reflected in the records.

Question 7 Partially correct Mark 1.33 out of 2.00 Flag question Warranty Costs Milford Company sells a motor that carries a three-month unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, two percent of the units sold will require repair at an average cost of $50 per unit. The following data reflect Milford's recent experience: October November December Dec. 31 Total Units sold 26,000 26,000 28,000 80,000 Known product failures from sales in: October 130 190 160 480 November 140 220 360 December 210 210 Calculate, and prepare a journal entry to record, the estimated liability for product warranties at December 31. Assume that warranty costs of known failures have already been reflected in the records. General Journal Date Description Debit Credit Dec.31 Product Warranty Expense 80,000 $ 0 Estimated Liability for Product Warranty - 0 0 X To provide for estimated future warranty expense. Check