Lawn Ranger Manufacturing makes lawn care products that are sold with a one-year warranty covering parts and labor. The following table lists the percentage of products that are returned while under warranty, average warranty-related cost incurred on each returned item, and sales per product line for March.
(a) Compute the estimated product warranty expense that should be recorded by Lawn Ranger at the end of March and prepare the appropriate March 31 adjusting entry.
(b) Suppose that during the first week of June, the company incurs warranty-related costs of $1,800 in inventory parts and $400 for labor. The labor costs will be paid on June 15. Prepare the entry to record the warranty costs.

  • CreatedMarch 27, 2015
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