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 custom 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.

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 custom 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.

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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