Question 6 (Topic 11) - 5 marks The following information is related to Sunglow Solar...
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Accounting
Question 6 (Topic 11) - 5 marks
The following information is related to Sunglow Solar Ltd:
- Sales for the year ended 30 June 2019 was $1,200,000
- Provision for warranties before adjustment was $36,000
At 30 June 2019, Sunglow Solar Ltd. adjusted its Provision for Warranties so that it would be equal to 4% of sales for the year ended on that date.
On 16 September 2019, a successful claim for warranty on faulty goods to the cost of $700 was made on Sunglow Solar Ltd.
Required:
- Prepare the general journal entry at 30 June 2019 to adjust the Provision for Warranties to the required level. (3 marks)
- Record the payment of the warranty claim on 16 September 2019 in general journal format. (2 marks)
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