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Prepare any necessary adjusting entries at December 31, 2013, for Maxum Company's year end financial statements for each of the following separate transactions and events.
1. Employees earn vacation pay at a rate of one day per month. During December, 20 employees qualify for one vacation day each. Their average daily wage is $ 160 per employee.
2. During December, Maxum Company sold 12,000 units of a product that carries a 60 day warranty. December sales for this product total $ 460,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $ 15.
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