If Sunland fixed an engine himself instead of replacing it with a new engine, what account would be credited instead of Merchandise Inventory?

If Sunland fixed an engine himself instead of replacing it with a new engine, the account would be credited instead of the Merchandise Inventory account.

Sunland Company sells remote control airplane engines, which carry a one-year warranty. If a customer brings in a defective engine, he replaces the engine with a new one from his inventory. Sunland estimates that 2% of units sold will be defective. As at January 1, the Warranty Liability had a credit balance of $400. Sunland provided the following information for his year end of December 31. Cost per engine Total sales Actual warranty costs $150 930 units $1,195 Calculate the estimated warranty expense for the year. Estimated warranty expense $ List of Accounts Prepare the journal entry for the estimated warranty expense for the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Debit Credit Date Account Titles and Explanation Dec. 31 List of Accounts Prepare the journal entry to record the actual warranty costs for the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Debit Credit Date Account Titles and Explanation Dec. 31 List of Accounts Calculate the ending balance in the warranty liability account at the end of the year. Ending balance in warranty liability account $ $ List of Accounts If Sunland fixed an engine himself instead of replacing it with a new engine, what account would be credited instead of Merchandise Inventory? If Sunland fixed an engine himself instead of replacing it with a new engine, the account would