Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000. Marques adjusts its accounts monthly. A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022. Instructions: a) Prepare the adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022
Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000. Marques adjusts its accounts monthly. A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022. Instructions: a) Prepare the adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Marques Company provides a one-year warranty on its products. The estimated rate of defective products returned during the warranty period is 3% of sales. Sales for the month of June 2022 were $420,000.
Marques adjusts its accounts monthly.
A customer received warranty repairs requiring $380 of parts and $290 of labour during the month of July 2022.
Instructions:
- a) Prepare the
adjusting journal entry on June 30, 2022 (the end of the first month of the current fiscal year) to record the accrued product warranty. - b) Prepare the journal entry to record the warranty work completed during July 2022 on July 31, 2022.
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