Computers sold in 20x4: $2,000,000

Warranty applies for this many more years: 2 years

Estimated Warranty % for 20x5: 1.5%

Estimated warranty % for 20x6: 2.0%

Customer claims actually made 20x5: $23,000

Customer claims actually made 20x6: $13,000

a. What amount should be recorded in the estimated warranty liability account at the balance sheet date 12/31/X4?

b. Record the journal entry for actual warrant claims in 20X5. What is the impact on net income?

c. Record the journal entry for actual warranty claims in 20X6. What is the impact on net income?

d. Record the journal entry for actual warrant claims in 20X6. What is the impact on the liability section ONLY of the balance sheet?