E$10\mathrm{.}11($LO $2)$ AP Gametime Inc. began selling game consoles on November $1,2024.$ The company offers a $60-$day

warranty for defective merchandise. Based on past experience with other similar products, Gametime estimates that $3\mathrm{.}0\%$ of

the units sold will become defective in the warranty period, and that the average cost of replacing or repairing a defective

unit is $$50.$ In November, Gametime sold $30,0$oo units and $450$ defective units were returned. In December, Gametime sold

$32,000$ units and $630$ defective units were returned. The actual cost of replacing the defective units was $$43,200.$

Instructions

a$.$ Prepare a journal entry to accrue for the estimated warranty costs for the November and December sales at December

$31,2024.$

b$.$ Prepare one summary journal entry at December $31,2024,$ to record the cost of replacing the defective game consoles

returned during November and December.

c$.$ What amounts will be included in Gametime's $2024$ income statement and balance sheet at December $31,2024,$ with

regard to the warranty?