Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue O Estimated Warranty Payable Cash O Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500

Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue O Estimated Warranty Payable Cash O Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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Kimber Sales offers warranties on all their electronic goods. Warranty expense is estimated at 3.5% of sales revenue. In 2018, Kimber had $333,000 of sales. In the same year, Kimber paid out $8,750 of warranty payments. Provide the journal entry to record the warranty expense. What is the balance of the liability account? Account name Debit Credit
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