USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Trail Runner USA can expect warranty costs during the five-year period to add up to 3% of sales. Assume that a Trail Runner USA dealer in Denver, Colorado, made sales of $670,000 during 2018. Trail Runner USA received cash for 35% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $19,000 during 2018. Record the sales, warranty expense, and warranty payments for Trail Runner USA. Ignore cost of goods sold. Post to the Accrued Warranty Payable T-account. The beginning balance was $16,000. At the end of 2018, how much in accrued warranty payable does Trail Runner USA owe to its customers?
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USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Trail Runner USA can expect warranty costs during the five-year period to add up to 3% of sales. Assume that a Trail Runner USA dealer in Denver, Colorado, made sales of $670,000 during 2018. Trail Runner USA received cash for 35% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $19,000 during 2018.
Record the sales, warranty expense, and warranty payments for Trail Runner USA. Ignore cost of goods sold.
Post to the Accrued Warranty Payable T-account. The beginning balance was $16,000. At the end of 2018, how much in accrued warranty payable does Trail Runner USA owe to its customers?
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