Trekster Corporation guarantees its snowmobiles for three years Company experience indicates that warranty costs will add up to 4 of sales Assume that the Trekster dealer in Colorado Springs made sales totaling $533,000 during 2012 The company received cash for 30 of the sales and notes receivable ...

Req 1 Journal Entry DATE ACCOUNTS AND EXPLANATIONS POST REF DEBIT CREDIT Dec 31 Cash 533000 30 1 ...

Trekster Corporation guarantees its snowmobiles for three years. Company experience indicates that warranty costs will add up

Question:

Trekster guarantees its snowmobiles for three years. Company experience indicates that warranty costs will add up to 4% of sales. Assume that the Trekster in Colorado Springs made sales totaling $533,000 during 2012. The company received cash for 30% of the sales and notes receivable for the remainder. Warranty payments totaled $17,000 during 2012.
Requirements
1. Record the sales, warranty expense, and warranty payments for the company.
2. Post to the Estimated warranty payable T-account. At the end of 2012, how much in Estimated warranty payable does the company owe?

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