On September 11, 2017, Home Store sells a mower (that costs $200) for $500 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On July 24, 2018, the mower is brought in for repairs covered under the warranty requiring $35 in materials taken from the Repair Parts Inventory. Prepare the September 11, 2017, entry to record the mower sale, and the July 24, 2018, entry to record the warranty repairs.

Question

Jayla Price

Business

26 August, 05:26

On September 11, 2017, Home Store sells a mower (that costs $200) for $500 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On July 24, 2018, the mower is brought in for repairs covered under the warranty requiring $35 in materials taken from the Repair Parts Inventory. Prepare the September 11, 2017, entry to record the mower sale, and the July 24, 2018, entry to record the warranty repairs.

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Jimmy Oneal · Answer 1

Journal entries

Explanation:

The journal entries are shown below:

On September 11, 2017

Cash Dr $500

To Sales $500

(Being the sales is recorded)

On September 11, 2017

Warranty expense $40 ($500 * 8%)

To Estimated warranty liability $40

(Being the warranty expense is recorded)

On July 24, 2018

Estimated warranty liability $35

To Repairs parts inventory $35

(Being the warranty repairs are recorded)