Gladiator USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Gladiator USA can expect warranty costs during the five-year period to add up to 3% of sales. Assume that a Gladiator USA dealer in Denver, Colorado, made sales of $682,000 during 2021. Gladiator USA received cash for 40% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $18,800 during 2021.

Requirements 1. Record the sales, warranty expense, and warranty payments for Gladiator USA. Ignore cost of goods sold. 2. Post to the Accrued Warranty Payable T-account. The beginning balance was $12,000. At the end of 2021, how much in accrued warranty payable does Gladiator USA owe to its customers? Accrued Warranty Payable Cash Notes Receivable Sales Revenue Warranty Expense