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Question - Sales for the year 2018 were $234 000. The company estimates that 3.5% of sales will require a warranty repair in 2018. The estimated warranty payable balance was $99 000 in 2017 and there were warranty claims of $64 000 in the current period.
Required -
a. Explain what is meant by a warranty.
b. Calculate the warranty payable at the end of 2018 and show the Journal entry.
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Make an adjusting enrty for the following. This is unadjusted TB. The book keeper incorrectly credited sales for a recipt onaccount for 4000.This error had not been corrected on Dec 31
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