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Question - A seller of computers, Pragmatic Supplies offers a 4-year warranty on goods sold to make their products more attractive to customers. For 2022, total sales are $984,400, and the company sold 403 units. Averaging $84.00 per computer for warranty costs, the company figures that 10% of the actual physical computers sold have some sort of warranty repair.
Required -
A. Calculate the estimated warranty expense for the current year, 2022. Prepare the Journal Entry.
B. In April, Pragmatic Supplies repaired 7 computers from 2021, with a total repair cost of $1,081. Prepare the required journal entry.
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