Question
Wellington Plumbing purchases sinks for 800 and sells them for 1500 each. during april, wellington sold 400 sinks. the sale price includes a 1 year
Wellington Plumbing purchases sinks for 800 and sells them for 1500 each. during april, wellington sold 400 sinks. the sale price includes a 1 year warranty. Wellington's history indicates that the warranty expense is 2% of gross sales.
a) prepare the journal entry to record the warranty expense for April
b) during January, wellington replaced 12 sinks due to product warranty claims. wellington will replace t he sinks previously sold with sinks from their inventory. write the journal entry to record the settlement of the warranty claims.
c) Assume the Estimated Warranty Payable account had a beginning balance of 16,000. what would the ending balance be after journal entries from a and b above?
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