In 2020, Mohamed's Mowers sells 1200 lawn mowers for $325 each and offers a 1-year warranty.

The cost of each mower is $250

The company estimates that 4% of mowers sold will be returned under the warranty.

Returned items will cost $150 to repair. The company pays cash for the repairs.

Required:

a) Record the 2020 sales (and associated costs) at Dec 31, 2020. Assume all sales are cash.

b) The company spent $6500 on repairs in 2020. Prepare the journal entry for these repairs.