Question

On September 1, Home Store sells a mower (that costs $310) for $610 cash with a one-year warranty that covers parts. Warranty expense is estimated at 9% of sales. On January 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $43 in materials taken from the Repair Parts Inventory.

Required:
Prepare the September 1 entry to record the mower sale (and cost of sale) and the January 24 entry to record the warranty repairs.

Answer 1

Answer: Please find answer in explanation column

Step-by-step explanation:

1. To record the sale of mower.

Date Account Titles and explanation Debit Credit

Sep 1 Cash $610

Sales revenue $610

2.Journal To record the cost of mower sales

Date Account Titles and explanation Debit Credit

Sep 1 Cost of Goods Sold $310

Inventory $310

3.Journal To record the warranty expense

Date Account Titles and explanation Debit Credit

Sep 1 Warranty expense $54.90

Estimated warranty liability $54.90

Calculation

Warranty expense = $610 X 9%=$54.90

4.Journal to record the cost of the warranty repairs.

Date Account Titles and explanation Debit Credit

Jan 24 Estimated warranty liability $43

Repair parts inventory $43