Question

On September 11, 2016, Home Store sells a mower for $620 with a one-year warranty that covers parts. Warranty expense is estimated at 8 % of sales. On July 24, 2017, the mower is brought in for repairs covered under the warranty requiring $43 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.) poin View transaction list eBook Journal entry worksheet Hint > < 3 1 References Record the mower sales. Note: Enter debits before credits Credit Debit General Journal Date Sep 11, 2016 View general journal Clear entry Record entry

Answer 1

WORKING NOTES: 1
	Total Sales of Parts	$                        620
	Estimatged Warranty Expenditures = 8% of $ 620	$                     49.60
SOLUTION:
Journal Entries
Date	Account Title and explanation	Debit	Credit
	Record the Mower Sales
Sept 11, 2016	Cash	$                        620
	To Sales		$                           620
	Record the Warranty Expenses
Sept 11, 2016	Warranty Expenses	$                     49.60
	To Estimated Warranty Liabilites		$                       49.60
	(To Record the warranty Expenses of the year)
July 24, 2017	Estimated Warranty Liabilites	$                     43.00
	To Parts Inventory		$                       43.00
	(To Record the consumption of warranty)