Estimated Warranty Liability

Cook-Rite Co. sold $722,000 of equipment during January under a six-month warranty. The cost to repair defects under the warranty is estimated at 6.5% of the sales price. On August 15, a customer required a $280 part replacement, plus $155 of labor under the warranty.

Required:

(a)Provide the journal entry for the estimated warranty expense on January 31 for January sales.

• Jan. 31Accounts Payable
• Cash
• Product Warranty Expense
• Product Warranty Payable
• Supplies
• Accounts Payable
• Cash
• Product Warranty Expense
• Product Warranty Payable
• Wages Payable

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(b)Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank.

• Aug. 15Accounts Payable
• Product Warranty Expense
• Product Warranty Payable
• Supplies
• Wages Expense
• Accounts Payable
• Cash
• Product Warranty Expense
• Product Warranty Payable
• Supplies
• Cash
• Product Warranty Expense
• Product Warranty Payable
• Unearned Wages
• Wages Payable