Determine the warranty liability

Assignment Help Accounting Basics

Reference no: EM13149681

Digital Audio Works, Inc. warrants its product for 1 year. The estimated product warranty is 1.5% of sales. Assume tha sales were $975,000 for January. In February, a customer received warranty repairs requiring $5,280. of parts.

a. Determine the warranty liability at January 31, the end of the first month of the current year.

b. What accounts are decreased for the warranty work provided in February?

Reference no: EM13149681

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