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Brief Exercise 8-11(Algo) Record warranty liability (LO8-5) Cloudy introduces a new compact music...

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Accounting

Brief Exercise 8-11(Algo) Record warranty liability (LO8-5)
Cloudy introduces a new compact music player that carries a two-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 1% of sales. By the end of the first yea of selling the product, total sales are $29.3 million, and actual warranty expenditures are $130,000.
Record the adjusting entry for the remaining expected future warranty costs as of December 31, the end of the reporting period. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answer in dollars, not millions. For example, $5.5 million should be entered as 5,500,000.)
Journal entry worksheet
1
Record the adjusting entry for the remaining expected future warranty costs as of December 31, the end of the reporting period.
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