How will the warranty liability be reported on balance sheet

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Question - Park Green corporation started its business in 2020. It sold computers and electronics items for $186,600 in 2020. The company has provided a 2- year limited warranty for all sales. The company's estimate is that warranty costs for the first year will be 1% and will be 2.5% in the second year. Park Green Corporation spent $1,930 on warranty repairs during 2020.

Required -

a. Make all journal entries related to the warranty for 2020.

b. How will the warranty liability be reported on the balance sheet on Dec 31, 2020?

Reference no: EM132859024

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