Return to question Helpi Auto Parts Ltd. offers a six-month warranty on parts that the company has installed. This warranty ensures that parts are working as intended. The warranty covers the cost of parts, plus labour for repairs. Warranty costs are estimated to be 1.5% of sales for parts plus 3% of sales for labour. On 1 April, the warranty liability had a $16,400 credit balance. Warranty work in April consumed $8,700 of parts and $14,000 of labour. Sales amounted to $55,000 in April. 

Required: 

1. What amount of warranty expense should be recorded in April? Warranty expense 

2. What is the balance in the warranty provision at the end of April? Balance in the warranty provision