Grain Company sells a product for $760. When the customer buys it, Grain provides a one - year warranty. Grain sold 1,500 products during 2019 . Based on analysis of past warranty re cords, Grain estimates that repairs will average 6% of total sales .

You are asked to do the following:

1. Prepare the journal entry to record the estimated liability.

2. Assume that during 2019 , products under warranty must be repaired using repair parts f rom inventory costing $49,600. Prepare the journal entry to record the repair of products.

3. Assume that the balance of the Estimated Liabilities for Warranties acc ount as of the beginning of 2019 was $1,700. Calculate the balance of t he account as of t he end of 2019 .