Question

Accrued Product Warranty Perker Manufacturing Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $345.000 for January. In February, customer received warranty repairs requiring $130 of parts and $75 of labor For a compound transaction, if an amount box does not require an entry leave it blank a. Joumalize the adjusting entry required at anuary 31, the end of the first month of the current fiscal year to record the accrued product warranty b. Journalize the entry to record the warranty work provided in February

Answer 1

Solution:

Journal Entries - Parker Manufacturing Company
Event	Particulars	Debit	Credit
a	Warranty Expense Dr ($345,000*3%)	$10,350.00
	To Warranty Payable		$10,350.00
	(To record warranty provision)
b	Warranty Payable Dr	$205.00
	To Parts inventory		$130.00
	To Wages payable		$75.00
	(To record repair under warranty by customer)