Reference no: EM132626936

Question - During August, Boxer Company sells $356,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $12,800 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs. Find the entry to record the estimated warranty expense for the month?

a. Debit Warranty Expense $17,800; credit Estimated Warranty Liability $17,800.

b. Debit Warranty Expense $5,000; credit Estimated Warranty Liability $5,000.

c. Debit Warranty Expense $14,400; credit Estimated Warranty Liability $14,400.

d. Debit Estimated Warranty Liability $9,400; credit Warranty Expense $9,400.

e. Debit Estimated Warranty Liability $17,800; credit Warranty Expense $17,800.