During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty. December sales for this product total $127,000. The company expects 6% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $19. Record the related adjusting entry.

FINANCIAL ACCOUNTING
10th Edition
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty. December sales for this
product total $127,000. The company expects 6% of the units to need warranty repairs, and it estimates the average repair
cost per unit will be $19. Record the related adjusting entry.
Transcribed Image Text:During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty. December sales for this product total $127,000. The company expects 6% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $19. Record the related adjusting entry.
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