Classic Sales Corporation offers warranties on all their electronic goods Warran

Question

Classic Sales Corporation offers warranties on all their electronic goods Warranty expense is estimated at 3% of sales revenue payments. Which of the following is the entry needed to record the estimated warranty expense O A. Warranty Expense O B. Warranty Expense In 2018 the company had S60200 of sales a the same year, it paid o, s o we a Estimated Warranty Payable Estimated Warranty Payable Sales Revenue 12,000 18,060 18,060 O C. Warranty Expense 18,060 18,060 O D. Estimated Warranty Payable 12,000 Cash 12.000 Click to select your answer F11

Explanation / Answer

THe correct answer is B.

Because the company is estimating 3% of warranty expense in the year which comes to $18.060. So the estimated expense of warranty will be $18,060. So we will debit the expense and credit the Warranty payable.

Further the company has paid warratny of $12,000 which will be reocorded as below

Warranty payable                 12000

   Cash                                                  12000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---