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During December, Vixen Company sells $850,000 in merchandise that has a one-year warranty. Warranty expense is estimated at 3% of sales. On January 5 of
During December, Vixen Company sells $850,000 in merchandise that has a one-year warranty. Warranty expense is estimated at 3% of sales. On January 5 of the following year, the merchandise requires repairs that are completed the same day. The repairs cost $14,000 for materials taken from parts inventory. The entry to record the repairs that occur on January 5 is:
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