During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is: Multiple Choice A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500. D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000. E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is: Multiple Choice A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500. D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000. E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 34E
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Question
During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is:
Multiple Choice
B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000.
D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000.
E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500.
C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500.
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