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3 February, 23:26

Bears Inc. sells football helmets to local schools and warrants all of its products for one year. While no helmets sold in 2021 have been returned yet, based upon previous years, Bears Inc. estimates that 3% of its products will need repairs or be replaced within the next year. What effect would this warranty have on assets, liabilities, and stockholders' equity in 2021?

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  1. 4 February, 00:19
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    No journal entry is necessary until products under warranty are returned

    Explanation:

    In this question, we are asked to state the effect that a warranty on a product would have on stockholder's equity, assets and liabilities.

    The correct answer to this No journal entry is necessary.

    This is because the journal entry is not necessary until products under warranty are returned
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