Instructions Quantas Industries sold $270,000 of consumer electronics during Jan

Question

Instructions Quantas Industries sold $270,000 of consumer electronics during January under a one-year warranty. The cost to repair defects under the warranty is estimated at 6% of the sales price. On June 20, a customer was given $161 cash under terms of the warranty. Journalize the entry to record (a) the estimated warranty expense on January 31 for January sales on page 10 of the journal and (b) the June 20 warranty work on page 14 of thee journal. Refeothe Chart of Accounts for exact wording of account titles.

Explanation / Answer

Date Description Post ref Debit Credit Assets Liabilities Equity 31-Jan Warranty expense 16200 -16200 (270000*6%) Estimated Warranty liability 16200 16200 20-Jun Estimated Warranty liability 161 -161 Cash 161 -161

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