Exercise 11-12 Accounting for estimated liabilities LO P4

Listed below are a few transactions and events of Maxum Company.

1. Employees earn vacation pay at a rate of one day per month. During December, 39 employees qualify for one vacation day each. Their average daily wage is $280 per employee.
2. During December, Maxum Company sold 4,900 units of a product that carries a 60-day warranty. December sales for this product total $121,000. The company expects 5% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $19.

Prepare any necessary adjusting entries at December 31, 2017, for Maxum Companys year-end financial statements for each of the above separate transactions and events.

Journal entry worksheet Employees earn vacation pay at a rate of one day per month. During December, 39 employees qualify for one vacation day each. Their average daily wage is $280 per employee. Record the related adjusting entry. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet