Quinton Mechanics Ltd offers a 12-month guarantee with all car repairs and service. On 1 July 2015, the balance of the Warranty Provision account was $2400. During the year ended 30 June, warranty claims cost $3000, of which $1000 was for parts and $2000 was for labour. During the same year, revenue from car repairs was $280 000, an increase of more than 20% on the previous year. Management estimated that the liability for unexpired warranty contracts at 30 June was $2400. There have been no changes in suppliers, product quality or prices. 

Required

(a) Prepare a journal entry to record the warranty claims during the year ended 30 June 2016.

(b) Prepare a journal entry to record the end-of-period adjustment to the Warranty Provision account.

(c) Comment on the appropriateness of the warranty provision at 30 June 2016. Do you think that the provision is adequate? Give reasons for your answer.