Bon Jovie Industries warrants its products for one year. The estimated product warranty is 4.3% of sales. Sales were $475,000 for September. In October, a customer received warranty repairs requiring $215 of parts and $65 of labor. Required: Journalize the adjusting entry required at September 30, the end of the first month of the current year, to record the estimated product warranty expense. Journalize the entry to record the warranty work provided in October.

A warranty obligation is created when sales is made. It remain on the BS till all of them are used…

Answered: Journalize the adjusting entry required…

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

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 10RE

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Bon Jovie Industries warrants its products for one year. The estimated product warranty is 4.3% of sales. Sales were $475,000 for September. In October, a customer received warranty repairs requiring $215 of parts and $65 of labor.

Required:

Journalize the adjusting entry required at September 30, the end of the first month of the current year, to record the estimated product warranty expense.

Journalize the entry to record the warranty work provided in October.

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