Question

On September 1, Home Store sells a mower (that costs $270) for $570 cash with a one-year warranty that covers parts. Warranty expense is estimated at 10% of sales. On January 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $40 in materials taken from the Repair Parts Inventory.

Prepare the September 1 entry to record the mower sale (and cost of sale) and the January 24 entry to record the warranty repairs. (Round your answers to 2 decimal places.)

Answer 1

Answer
Date	Account Title	Debit	Credit
Sep-01	Cash	$     570
	Sales revenue		$     570
	( To record sale )
Sep-01	Warranty expense	$       57
	Estimated warranty liability		$       57
	(570*10%)
	( To record Warranty expense )
Jul-24	Estimated warranty liability	$       40
	Repair part inventory/Supplies		$       40
	(To record Warranty incurred)