h a warranty that covers the cost of both labor and parts for repairs year perio
ID: 2593242 • Letter: H
Question
h a warranty that covers the cost of both labor and parts for repairs year period following the date of purchase. They estimate their warranty mith Bicycles sells its bicycles wit the owner will need for a one costs based on their historical experience as 3% of total sale performed provided warranty work for its customers and incurred $50,000 of parts and labor perform this warranty work. Bicycle sales for November were $1,450,000. (25 pts) s. During the month of November, Smith while Required (show your work): a. Compute the amount of the warranty expense for the month of November. Show the journal entry that would be necessary to record the warranty expense computed in a. above. b. c. At October 31", Smith had a credit balance in its Accrued Warranty Liability account of $75,000. What would the balance in the account be at November 30th?Explanation / Answer
a. Amount of warranty expense for the month of November will be $50,000
b. Journal entry will be:
c. Balance in the accrued liability account will be $75,000-$50,000 = $25,000
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