Question: The accounting records of Dee s Appliances included the following balances

The accounting records of Dee’s Appliances included the following balances at the end of the period:

In the past, Dee’s warranty expense has been 8% of sales. During the current period, the business paid $7,100 to satisfy the warranty claims.

1. Journalize Dee’s warranty expense for the period and the company’s cash payments to satisfy warranty claims. Explanations are not required.
2. Show what Dee’s Appliances will report on its income statement and balance sheet for this situation at the end of the period.
3. Which data item from requirement 2 will affect Dee’s current ratio? Will Dee’s current ratio increase or decrease as a result of thisitem?

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  • CreatedJuly 25, 2014
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