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, 20 employees qualify for one vacation day each. Their average daily wage is $150 per employee. 2. During December, Maxum Company sold 3,700 units of a product that carries a 60-day warranty. December sales for this product total l $127,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $18. 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, 20 employees qualify for one vacation day each. Their average daily wage is $150 per employee. Record the related adjusting entry. Note: Enter debits before credits

Answer 1

Transaction	General Journal	Debit	Credit
1	Vacation benefits expense(20 employees × 1 day × $150)	$3,000
	Vacation benefits payable		$3,000
2	Warranty expense(3,700 units × 10% × $18)	$6,660
	Estimated warranty liability		$6,660