Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 6% of sales. Assume that sales were $540,000 for January. On February 7, a customer received warranty repairs requiring $160 of parts and $75 of labor. Required: 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. Refer to the Chart of Accounts for exact wording of account titles. b. Journalize the entry to record the warranty work provided in February. Refer to the Chart of Accounts for exact wording of account titles.

Respuesta :

Answer: The answer is given below

Explanation:

The journal is used to record transactions for a business or an organization.

It should be noted that the product warranty expense of $32,400 provided in the attached file was gotten as:

= 6% of $540,000

= 6/100 × $540,000

= 0.06 × $540,000

= $32,400

The journal entries for (a) and (b) has been prepared and attached.

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