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A company sells computers for $1,800 each. Each computer has a two-year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty with an average cost of $150 each. During November, the company sold 30,000 computers;. 400 computers were serviced under the warranty during November at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. Prepare the journal entries to record the warranty liability expense for November, and the warranty repairs that occurred in November. Plus determine what the ending balance for the estimated warranty allowance?
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