Instructions Parker Manufacturing Co. warrants its products for one year. The es
ID: 341218 • Letter: I
Question
Instructions Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 6% of sales. Assume that sales were $500,000 for January. In February, a customer received warranty repairs requiring $140 of parts and $65 of labor Required A. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. Refer to the Chart of Accounts for exact wording of account titles B. On February 28, journalize the entry to record the warranty work provided in February. Refer to the Chart of Accounts for exact wording of account titlesExplanation / Answer
A Date Description Post ref Debit Credit Assets Liabilities Equity 31-Jan Product warranty Expense 30000 -30000 Product warranty Payable 30000 30000 B 28-Feb Product warranty Payable 205 -205 Merchandise inventory 140 -140 Wages payable 65 65