Ecco Company sold $151,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 9% of the sales price. On October 15, a customer required a $120 part replacement, plus $87 labor under the warranty.

Provide the journal entry (a) the estimated expense on September 30 and (b) the October 15 warranty work.

The appropriate journal entry to record the estimated expense on September 30 and the October 15 warranty work are:

a. Ecco Company journal entry

September 30

Debit Warranty expense $13,590            

($151,000 × 9%)

Credit Warranty payable $13,590    

(To record estimated expense)

b. September 30

Debit Warranty payable   $207

($120+$87)

Credit Supplies  $120

Credit Wages payable $87

(To record warranty work)

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The journal entries are shown below

Explanation:

The journal entries are as follows

a. Product warranty expense $13,590             ($151,000 × 9%)

        To Product warranty payable$13,590    

(Being the warranty estimated expense is recorded)

b. Product warranty payable   $207

                To Supplies  $120

                 To Wages payable $87

(Being the warranty work is recorded)

Only these two entries are passed

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o