Answer:
Dr Warranty expenses 9,320
Cr Estimated Warranty Liability 9,320
Explanation:
Preparation of thecurrent period's entry to record the warranty expense for A company
Since A company estimates that the warranty expense will be 4% of sales while the sales for the current period are $233,000 this means we have to find the 4% of $233,000 which gives us 9,320.
Hence the transaction will be recorded as :
Dr Warranty expenses 9,320
(4%×233,000)
Cr Estimated Warranty Liability 9,320
