Ecco Company sold $151,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 9% of the sales price. On October 15, a customer required a $120 part replacement, plus $87 labor under the warranty.

Provide the journal entry (a) the estimated expense on September 30 and (b) the October 15 warranty work.

Question

Business

Rhett Rivera

24 November, 10:48

Ecco Company sold $151,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 9% of the sales price. On October 15, a customer required a $120 part replacement, plus $87 labor under the warranty.

Provide the journal entry (a) the estimated expense on September 30 and (b) the October 15 warranty work.

+2

Answers (1)

Know the Answer?

Jaida Foster · Answer 1

The journal entries are shown below

Explanation:

The journal entries are as follows

a. Product warranty expense $13,590 ($151,000 * 9%)

To Product warranty payable $13,590

(Being the warranty estimated expense is recorded)

b. Product warranty payable $207

To Supplies $120

To Wages payable $87

(Being the warranty work is recorded)

Only these two entries are passed