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Fantastic Co. sold $150,000 of kitchen appliances during August under a six month warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On September 12, a customer required a $2000 part replacement plus $90 of labor under the warranty. Journal entry to record estimated warranty expenses will be: Select one: a. Provision for product warranty Dr 9,000 Warranty Expenses Cr 9,000 b. Provision for product warranty Dr 2090 Warranty Expenses Cr 2090 c. Right option is not listed d. Warranty Expenses Dr 7,500 Provision for product warranty Cr 7,500

Fantastic Co. sold $150,000 of kitchen appliances during August under a six month warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On September 12, a customer required a $2000 part replacement plus $90 of labor under the warranty. Journal entry to record estimated warranty expenses will be: Select one: a. Provision for product warranty Dr 9,000 Warranty Expenses Cr 9,000 b. Provision for product warranty Dr 2090 Warranty Expenses Cr 2090 c. Right option is not listed d. Warranty Expenses Dr 7,500 Provision for product warranty Cr 7,500

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 10RE
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Fantastic Co. sold $150,000 of kitchen appliances during August under a six month warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On September 12, a customer required a $2000 part replacement plus $90 of labor under the warranty. Journal entry to record estimated warranty expenses will be:
Select one:
a. Provision for product warranty Dr 9,000 Warranty Expenses Cr 9,000
b. Provision for product warranty Dr 2090 Warranty Expenses Cr 2090
c. Right option is not listed
d. Warranty Expenses Dr 7,500 Provision for product warranty Cr 7,500
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