The auditor for Universal Tools, Inc. discovered in 2023 that the warranty liability account showed a $25,000 debit balance. She investigated and discovered that the 2% estimate based on sales for warranty expense was recorded and understated, and it was more likely 3.5%. Sales for 2023 were $5,750,000. What is the appropriate journal entry as a result of this discovery? Group of answer choices Warranty Expense 86,250 Warranty Liability 86,250 Warranty Expense 201,250 Warranty Liability 201,250 Warranty Liability 86,250 Warranty Expense 86,250 Warranty Liability 25,000 Warranty Expense 25,000

The auditor for Universal Tools, Inc. discovered in 2023 that the warranty liability account showed a $25,000 debit balance. She investigated and discovered that the 2% estimate based on sales for warranty expense was recorded and understated, and it was more likely 3.5%. Sales for 2023 were $5,750,000. What is the appropriate journal entry as a result of this discovery? Group of answer choices Warranty Expense 86,250 Warranty Liability 86,250 Warranty Expense 201,250 Warranty Liability 201,250 Warranty Liability 86,250 Warranty Expense 86,250 Warranty Liability 25,000 Warranty Expense 25,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 8PA: The following select financial statement information from Candid Photography. Compute the accounts...

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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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