Question

Urgent help on accounting homework please?

At the beginning of 20X3, Shingles Roofing had a liability forwarranties of $7,000 on the books. During 20X3, Shingles Roofinghad sales of $310,000. The company estimates that the cost ofservicing products under warranty will average 2.5% of sales.Expenditures (all in cash) to satisfy warranty claims during 20X3were $6,200, of which $2,500 was for products sold in 20X3.

a.) Prepare the journal entries for sales revenue and therelated warranty expense for 20X3. Assume all sales are forcash.

b.) Prepare the journal entry for the warranty expenditures.

c.) Compute the December 31, 20X3, ending balance in theLiability for Warranties account.