Question 40 (Mandatory) (2.25 points)

28,225 units of merchandise inventory are sold during the accounting period, for a retail price of $125 per unit, and all units are covered under warranty. The estimated cost of repairs is 7.2% of sales price.

Provide the journal entry to recognize the product warranty expense:

Question 40 options:

	Dr. Product Warranty Expense $254,025 Cr. Product Warranty Payable $254,025
	Dr. Product Warranty Expense $3,528,125 Cr. Product Warranty Payable $3,528,125
	Dr. Product Warranty Payable $254,025 Cr. Product Warranty Expense $254,025
	Dr. Product Warranty Payable $3,528,125 Cr. Product Warranty Expense $3,528,125

Question 41 (Mandatory) (2.25 points)

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28,225 units of merchandise inventory are sold during the accounting period, for a retail price of $125 per unit, and all units are covered under warranty. The estimated cost of repairs is 7.2% of sales price.

Provide the journal entry to recognize the replacement of a $85 part per the warranty agreement:

Question 41 options:

	Dr. Inventory $85 Cr. Product Warranty Payable $85
	Dr. Product Warranty Payable $85 Cr. Product Warranty Expense $85
	Dr. Product Warranty Payable $85 Cr. Supplies $85
	Dr. Product Warranty Expense $85 Cr. Product Warranty Payable $85