70.2K

Verified Solution

Link Copied!

Whispering Winds Company sells products with a 2-year warranty. Past experience indicates that 2% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is estimated to be $70 per unit. During 2020, 8,000 units were sold at an average price of $400. During the year, repairs were made on 55 units at a cost of $3,600. Prepare journal entries to record the repairs made under warranty and estimated warranty expense for the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)

Account Titles and Explanation	Debit	Credit
enter an account title to record to record cost of honoring warranties	enter a debit amount	enter a credit amount
enter an account title to record to record cost of honoring warranties	enter a debit amount	enter a credit amount
(To record cost of honoring warranties)
enter an account title to accrue estimated warranty costs	enter a debit amount	enter a credit amount
enter an account title to accrue estimated warranty costs	enter a debit amount	enter a credit amount
(To accrue estimated warranty costs)

Answer & Explanation Solved by verified expert

See Answer