Question

On September 11, 2016, Home Store sells a mower for $530 cash with a one-year warranty that covers parts. Warranty expense is estimated at 7% of sales. On July 24, 2017, the mower is brought in for repairs covered under the warranty requiring $37 in materials taken from the Repair Parts Inventory. Prepare the September 11, 2016, entry to record the mower sale, and the July 24, 2017, entry to record the warranty repairs. (Round your answers to 2 decimal places.)

Sept 11 - Record the mower sales
Sept 11 - Record estimated warranty expense.
Jul 24 - Record cost of warranty repairs.

Date General Journal Debit Credit Sep 11, 2016

Answer 1

Date	Account	Debit	Credit
Sep 11	Cash	530
	Sales revenue		530
Sep 11	Warranty expense	37.10
	Estimated warranty liability		37.10
	(530*7%)
Jul 24	Estimated warranty liability	37
	Repair parts inventory		37