The accounting records of Carmine Appliances included the following balances at the end of the period: In

Question:

The accounting records of Carmine Appliances included the following balances at the end of the period:

In the past, Carmine's warranty expense has been 8% of sales. During the current period, the business paid $7,000 to satisfy the warranty claims.
Requirements
1. Journalize Carmine's warranty expense for the period and the company's cash payments to satisfy warranty claims. Explanations are not required.
2. Show what Carmine will report on its income statement and balance sheet for this situation at the end of the period.
3. Which data item from requirement 2 will affect the current ratio? Will Carmine's current ratio increase or decrease as a result of this item?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...