Paste BIU - A - Merge & Center. $ . % 9 8 % Conditional For Formatting . Ta Clipboard Font Alignment Number Style AZ D A B C 1 Question 7 (9 marks) 3 Maggie's Garden Products Limited began to buy and resell leaf blowers for $220 each. Maggie uses 4 a perpetual inventory system to account for her inventory. The leaf blowers are covered by a 60 5 day warranty. If a leaf blower is returned it is discarded and a new one is sent to the customer from 6 the existing inventory. The company's cost is $150 per unit. The manufacturer advised the company 7 to expect warranty costs equal to 15% of the total sales dollars. These are April's transactions: Apr 20 Sold 175 leaf blowers for cash. 9 10 11 Apr 28 Replaced 5 leaf blowers that were returned under warranty. Recognized warranty expense for April with an adjusting entry. 13 Apr 30 14 15 REQUIRED: 17 1. Record the transactions in the journal entry form provided. 18 Coversheet 01 02 03 04 05 06 07 08 Ready Type here to search Font Alignment Number A B C D 2. How much warranty expense will be reported for April? 3. How much warranty liability will be recorded at the end of April? 4. the Estimated Warranty Liability account has a debit balance throughout the entire year, what does that mean about the accruals being done? Coversheet Q1 Q2 Q3 24 25 26 27 28 Type here to search Fom Font Alignment Number A B C D 5. If the account has a debit balance at the end of the year, is retained earnings going to be over- or under-stated? Why? Coversheet Q1 Q2 Q3 04 05 06 07 08