The accounting records of Atkinson Books showed a balance of
The accounting records of Atkinson Books showed a balance of $2,000 in Estimated Warranty Payable at December 31, 2013. In the past, Atkinson's warranty expense has been 6% of sales. During 2014, Atkinson made sales of $329,000 on account and paid $6,000 to satisfy warranty claims.
Requirements
1. Journalize Atkinson’s sales, warranty expense, and cash payments made to satisfy warranty claims during 2014. Explanations are not required.
2. What balance of Estimated Warranty Payable will Atkinson report on its balance sheet at December 31, 2014?
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