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Employees earn vacation pay at a rate of one day per month. Maxum estimated and must...

Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $5,510 of accrued vacation benefits for the year.

During December, Maxum Company sold 3,600 units of a product that carries a 60-day warranty. December sales for this product total $124,000. The company expects 9% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $12. Prepare adjusting entries at December 31 for Maxum Company’s year-end financial statements for each of the above separate transactions.

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1 Vacation benefits expense 5510
       Vacation benefits payable 5510
2 Warranty expense 3888 =3600*9%*12
      Estimated Warranty liability 3888
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