What would be the journal entry to record the estimated liability for warranty on Dec. 31? * a. A debit to Warranty Expense of P 123,000 and a credit to Warranty Liability of P 123,000 b. A debit to Warranty Expense of P 150,000 and a credit to Warranty Liability of P 150,000 c. A debit to Warranty Expense of P 75,000 and a credit to Warranty Liability of P 75,000 d. A debit to Warranty Expense of P 61,500 and a credit to Warranty Liability of P 61,500
What would be the journal entry to record the estimated liability for warranty on Dec. 31? * a. A debit to Warranty Expense of P 123,000 and a credit to Warranty Liability of P 123,000 b. A debit to Warranty Expense of P 150,000 and a credit to Warranty Liability of P 150,000 c. A debit to Warranty Expense of P 75,000 and a credit to Warranty Liability of P 75,000 d. A debit to Warranty Expense of P 61,500 and a credit to Warranty Liability of P 61,500
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 6P
Related questions
Question
What would be the
a. A debit to Warranty Expense of P 123,000 and a credit to Warranty Liability of P 123,000
b. A debit to Warranty Expense of P 150,000 and a credit to Warranty Liability of P 150,000
c. A debit to Warranty Expense of P 75,000 and a credit to Warranty Liability of P 75,000
d. A debit to Warranty Expense of P 61,500 and a credit to Warranty Liability of P 61,500

Transcribed Image Text:LEYI Co., sells an electric timer that carries a 90-day unconditional warranty against product failure.
The warranty costs of known failures have already been reflected in the records.
Based on reliable statistical analysis, 2% of units sold will require an average cost of P 150 per unit
October
November
December
Units sold
16,000
14,000
20,000
Known product failures from sale of:
October
80
160
80
November
40
140
December
90
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you

Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College

College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,

Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College

College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,