Trail Runner USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Trail Runner

USA can expect warranty costs during the five-year period to add up to 5 % of sales. Assume that a Trail Runner USA dealer in Denver, Colorado, made sales of $474,000 during 2018. Trail Runner USA received cash for 30% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $19,000 during 2018. Record the sales, warranty expense, and warranty payments for Trail Runner USA (Record debits first, then credits.)

First, record the sale of the tires.

Journal Entry
		Accounts	Debit	Credit

Now, accrue the warranty expense.

Journal Entry
		Accounts	Debit	Credit

Next, record the payment of warranty expenses.

Journal Entry
		Accounts	Debit	Credit

2. Post to the Accrued Warranty Payable T-account. The beginning balance was

$ 17 comma 000$17,000.

At the end of 2018, how much in accrued warranty payable does Trail Runner USA owe to its customers?

Select the appropriate descriptions, and enter the beginning balance and post the entries to the Accrued Warranty Payable T-account. Calculate the balance of the liability account.

Accrued Warranty Payable

At the end of 2018, Trail Runner USA owes $

_______

to its customers from Accrued Warranty Payable.