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Horngren'S Financial And Managerial Accounting
Found in: Page 578

Short Answer

: O’Conner guarantees its vacuums for four years. Prior experience indicates that warranty costs will be approximately 6% of sales. Assume that O’Conner made sales totaling $200,000 during 2018. Record the warranty expense for the year.

The warranty expenses payable will be credited with $12,000

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Step by Step Solution

warranty Expense

Journal Entries

Date

Particulars

Debit

Credit

Year 2018

Warranty Expense (6% 0f $200000)

$12,000

Estimated warranty payable

$12,000

To accrue warranty payable.

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