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River Forest Appliances, Inc. sells food processors for $300 with a 120-day warranty against defects....

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Accounting

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River Forest Appliances, Inc. sells food processors for $300 with a 120-day warranty against defects. Past experiences indicate that 5% of the processors will have some defect during the warranty period and that the necessary repairs and adjustments will cost $50 per defective unit. Sales for August were $240,000. 30 units were reported defective and repaired in August. What is the August 31 journal entry for the estimated liability for product warranties for units sold in August? 2,000 2,000 Product Warranty Expense Estimated Liability for Product Warranty Product Warranty Expense Estimated Liability for Product Warranty 500 500 18,000 Product Warranty Expense Estimated Liability for Product Warranty 18,000 2,000 2,000 500 500 Product Warranty Expense Estimated Liability for Product Warranty Product Warranty Expense Estimated Liability for Product Warranty Product Warranty Expense Estimated Liability for Product Warranty Estimated Liability (for Product Warranty Product Warranty Expense 18,000 18.000 500 500

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