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Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue O Estimated Warranty Payable Cash O Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500

Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? O Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue O Estimated Warranty Payable Cash O Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue Estimated Warranty Payable Cash Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500
Transcribed Image Text:Classic Sales Corporation offers warranties on all their electronic goods. Warranty expense is estimated at 3% of sales revenue. In 2024, the company had $604,000 of sales. In the same year, it paid out $12,500 of warranty payments. Which of the following is the entry needed to record the estimated warranty expense? Warranty Expense Estimated Warranty Payable Warranty Expense Sales Revenue Estimated Warranty Payable Cash Warranty Expense Estimated Warranty Payable 18,120 18,120 12,500 12,500 18,120 18,120 12,500 12,500
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