On January 1, 2019, Pharoah Company began a warranty program to stimulate sales. It is estimated that 5% of the units sold will be returned for repair at an estimated cost of $36 per unit. Sales and warranty figures for the three years ended December 31 are as follows:

		2015			2016			2017
Sales (units)		1200			1700			1,900
Sales price per unit		$130			120			$125
Units returned for repair under warranty		75			90			105
Actual warranty costs		2160			2930			$3340

(a)

Correct answer iconYour answer is correct.

Calculate the warranty expense for each year and warranty liability at the end of each year.

		Warranty Expense		Warranty Liability
2019		$		$
2020		$		$
2021		$		$

Attempts: 1 of 3 used

(b)

Record the warranty transactions for each year. Credit Repair Parts Inventory for the actual warranty costs. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
2015
	(To record honouring warranty contracts.)
	(To accrue warranty expense.)
2016
	(To record honouring warranty contracts.)
	(To accrue warranty expense.)
2017
	(To record honouring warranty contracts.)
	(To accrue warranty expense.)