Accrued Product Warranty General Motors Company (GM) disclosed estimated product

Question

Accrued Product Warranty General Motors Company (GM) disclosed estimated product warranty payable for comparative years as follows: (in millions) Prior Year $2,721 4,880 $7,601 Current Year Current estimated product warranty payable Noncurrent estimated product warranty payable Total $3,582 6,064 $9,646 Assume that GM's sales were $155,929 million in the current year and that the total paid on warranty claims during the current year was $4,326 million a. The distinction between short- and long-term liabilities is important to creditors in order to accurately evaluate the near-term cash demands on the business relative to the quick current assets and other longer-term demands Feedback b. Provide the journal entry for the current year product warranty expense. Enter your answers in millions. Product Warranty Expense Product Warranty Payable

Explanation / Answer

General Journal Debit Credit Product Warranty Expense[$9,646 - ($7,601 - $4,326)] $6,371 Product Warranty Payable $6,371

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