Estimated Warranty Liability

Savory Co. sold $622,000 of consumer electronics during July under a two-year warranty. The cost to repair defects under the warranty is estimated at 4% of the sales price. On November 11, a customer was given $528 cash under terms of the warranty.

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Required:

a. Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank.

July 31	Accounts PayableCashProduct Warranty ExpenseProduct Warranty PayableSupplies	- Select -	- Select -
	Accounts PayableCashProduct Warranty ExpenseProduct Warranty PayableWages Payable	- Select -	- Select -

Question Content Area

b. Provide the journal entry for the November 11 cash payment. If an amount box does not require an entry, leave it blank.

Nov. 11	Accounts PayableProduct Warranty ExpenseProduct Warranty PayableSuppliesWages Expense	- Select -	- Select -
	Accounts PayableCashProduct Warranty ExpenseProduct Warranty PayableSupplies	- Select -	- Select -