Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a $90-$day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately $5\%$ of sales. Sales for the month of December are $$480,000.$ Actual warranty expenditures in January of the following year were $$17,000.$

Required:

Does this situation represent a contingent liability?

& $3.$ Record the necessary entries in the Journal Entry Worksheet below.

What is the balance in the Warranty Liability account after the entries in Parts $2$ and $3?$

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$ and $3$

Req $4$

Record the necessary tantries in the Journal Entry Worksheet below. $($If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$

Journal entry worksheet

$1$

$2$

$>$

Record the contingent liability for warranties.

Note: Enter debits before credits.

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$5$ of $5$

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