Marrero Company is engaged in the retail sale of washing machines. Each machine has a twentyfour-month warranty on parts. If a repair under warranty is

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Marrero Company is engaged in the retail sale of washing machines. Each machine has a twentyfour-month warranty on parts. If a repair under warranty is required, a charge for the labour is made. Management has found that 20 per cent of the machines sold require some work before At the beginning of June, the account for the estimated liability for product warranties had a credit balance of 28,600 . During June, 112 machines were returned under the warranty. The cost of the parts used in repairing the machines was 17,530 , and 18,884 was collected as service revenue for the labour involved. During the month, Marrero Company sold 450 new machines.

1. Prepare general journal entries to record each of the following:

(a) the warranty work completed during the month, including related revenue, and \((\mathrm{b})\) the estimated liability for product warranties for machines sold during the month. 2. Calculate the balance of the Estimated Product Warranty Liability account at the end of the month.