At the beginning of 2016, Davis Builders Pty Ltd had a credit balance of $130 000 in its Warranty Provision account. The warranty expense for the year was $42 000 and the balance of the Warranty Provision account at the end of the year after adjusting entries was $39 000. 

Required

(a) Calculate the cost of warranty claims during the period. (It may be helpful to reconstruct the Warranty Provision account.)

(b) Prepare journal entries to record the warranty claims during the period and end-ofperiod adjustments to the Warranty Provision account. Assume that all warranty costs were for the replacement of parts from spare parts inventory.