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Question - Ashbourne Ltd offers a 12-month warranty on kitchen appliances sold. On 1 July 2017 there was a credit balance of $90,000 in it Provisions for Warranties account. During the year ended 30 June 2018 Ashbourne Ltd incurred $88,000 in warranty costs of which $50,000 was from inventory and the remainder for labour costs. At the 30 June 2018 Ashbourne Ltd estimated its warranty expenditure for the following year would be $75,000
Note: Narrations are not required for the following entries:
Required -
(a) Prepare the General Journal entries to record the above.
(b) Post the above entries to the Provision for Warranties General Ledger.
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