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Question : Accrued Product Warranty
Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 5% of sales. Assume that sales were $346,000 for January. In February, a customer received warranty repairs requiring $140 of parts and $95 of labor.
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty.
b. Journalize the entry to record the warranty work provided in February.
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