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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Question 13
Masterpiece Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $603,000 in sales.
In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,500. Which of the following is the entry needed to record the replacement of
the defective goods?
Warranty Expense
Estimated Warranty Payable
18,090
18,090
O Estimated Warranty Payable
Merchandise Inventory
18,500
18,500
Estimated Warranty Payable
16,500
Merchandise lInventory
16,500
18,090
O Warranty Expense
Merchandise Inventory
18,090
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Transcribed Image Text:Question 13
Masterpiece Sales Company offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2019, the company had $603,000 in sales.
In the same year, Masterpiece Sales replaced defective goods with goods that had a cost of $18,500. Which of the following is the entry needed to record the replacement of
the defective goods?
Warranty Expense
Estimated Warranty Payable
18,090
18,090
O Estimated Warranty Payable
Merchandise Inventory
18,500
18,500
Estimated Warranty Payable
16,500
Merchandise lInventory
16,500
18,090
O Warranty Expense
Merchandise Inventory
18,090
«< Question 13 of 41 >>
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