Cheerolet Canada guarantees vehicles against defects for five years or 180,000 km whichever comes first. Suppose Cheerolet can expect warranty costs during this period to add up to 2.25% of sales. Assume that a local car dealership, Cheer-Guelph, made sales of $4,700,000 on their hybrid car line during 2021. Cheer-Guelph received cash for 22% of the sales and sells the rest on account. Payments to satisfy customer warranty claims totaled $87,000 during 2021. The beginning balance of the Estimated Warranty Payable account is zero. Requirement 1: Record the sales transaction (ignore CoGS/Inventory), warranty expense (using the Estimated Warranty Payable Account), and warranty payments for Cheer-Guelph. Ignore any reimbursement that Cheer-Guelph may receive from Cheerolet Canada. After submitting the online exam, upload the journal entries to the dropbox. Requirement 2: Please fill out the blanks below. Required format for entering numbers: enter plain amounts, no $-signs or commas. Round final results to total $-amounts. Blank #1: What $-amount did Cheer-Guelph record as Warranty Expense? Blank #2: What $-amount did Cheer-Guelph pay out to customers (Cash)? Blank #3: What is the ending balance of the Estimated Warranty Payable account ($- amount)?

Cheerolet Canada guarantees vehicles against defects for five years or 180,000 km whichever comes first. Suppose Cheerolet can expect warranty costs during this period to add up to 2.25% of sales. Assume that a local car dealership, Cheer-Guelph, made sales of $4,700,000 on their hybrid car line during 2021. Cheer-Guelph received cash for 22% of the sales and sells the rest on account. Payments to satisfy customer warranty claims totaled $87,000 during 2021. The beginning balance of the Estimated Warranty Payable account is zero. Requirement 1: Record the sales transaction (ignore CoGS/Inventory), warranty expense (using the Estimated Warranty Payable Account), and warranty payments for Cheer-Guelph. Ignore any reimbursement that Cheer-Guelph may receive from Cheerolet Canada. After submitting the online exam, upload the journal entries to the dropbox. Requirement 2: Please fill out the blanks below. Required format for entering numbers: enter plain amounts, no $-signs or commas. Round final results to total $-amounts. Blank #1: What $-amount did Cheer-Guelph record as Warranty Expense? Blank #2: What $-amount did Cheer-Guelph pay out to customers (Cash)? Blank #3: What is the ending balance of the Estimated Warranty Payable account ($- amount)?