Brief Exercise $8-56($Algorithmic$)$

Warranties

In $2019,$ Lee Electronics, a franchise of electronics stores located in small towns throughout the United States, sold $80032-$inch televisions for $$650$ each. The televisions carry an attached $3-$year warranty for repairs. Lee Electronics estimates that repair costs will average $5\mathrm{.}5\%$ of the total selling price.

Required:

How much is recorded in the Warranty Liability account as a result of selling the televisions during $2019,$ assuming no warranty service has yet been performed? $ estimated warranty liability

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T Check My Work

Warranty expense should be matched with the revenues it helped generate. As such, future warranty costs represent an obligation.

Provide the necessary adjusting entry at December $31,2019.$

Dec. $31$