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Problem - Accrued product warranty
Parker Products Co. warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $442,000 for September. In October, a customer received warranty repairs requiring $110 of parts and $86 of labor.
Required -
a. Journalize the adjusting entry required at September 30, 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 October.
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