The accounting records of Earth GadgetsEarth Gadgets showed a balance of$12,000 in Estimated warranty payable at December 31,

2017.

In the past, Earth Gadgets'Earth Gadgets' warranty expense has been 33 percent of sales. During20182018 ,Earth GadgetsEarth Gadgets

made sales of $415,000on account and paid$13,000 to satisfy warranty claims.

1.Journalize Earth Gadgets'Earth Gadgets' sales, warranty expense, and cash payments made to satisfy warranty claims during

2018.

Explanations are not required. Ignore cost of goods sold.

2.

What balance of Estimated warranty payable will

Earth GadgetsEarth Gadgets

report on its balance sheet at December 31,

20182018 ?

What amount of warranty expense will

Earth GadgetsEarth Gadgets

report on its income statement for the year ended December 31,

20182018 ?