Question

Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. During December, 37 employees qualify for one vacation day each. Their average daily wage is $130 per employee. 2. During December, Maxum Company sold 3,000 units of a product that carries a 60-day warranty. December sales for this product total $123,000. The company expects 9% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $11. Prepare any necessary adjusting entries at December 31, 2017, for Maxum Company's year-end financial statements for each of the above separate transactions and events. View transaction list Journal entry worksheet Employees earn vacation pay at a rate of one day per month. During December, 37 employees qualify for one vacation day each. Their average daily wage is $130 per employee. Record the related adjusting entry. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

Date	Account title	Debit	credit
December 31 ,2017
1	Vacation expense	4810
	Vacation payable		4810
	[Being vacation pay accrued :37*130]
2	warranty expense	2970
	Estimated warranty liability		2970

working:

Number of units subject to warranty : 3000*9%= 270 units

warranty cost = 270 *11= 2970