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 123,000b. A debit to Warranty Expense of P 150,000 and a credit to Warranty Liability of P 150,000c. A debit to Warranty Expense of P 75,000 and a credit to Warranty Liability of P 75,000d. A debit to Warranty Expense of P 61,500 and a credit to Warranty Liability of P 61,500 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 unitOctoberNovemberDecemberUnits sold16,00014,00020,000Known product failures from sale of:October8016080November40140December90

Warranty is a form of assurance that is being given to the buyer that in case product will have any…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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

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

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