Fle Edit View History Bookmarks Develop Window Help and 12 T

Fle Edit View History Bookmarks Develop Window Help and 12 Test Help Save&Exit; Submit During August. Boxer Company sells $363000 in merchandise that has a one year warranty Experience shows that warranty expenses ave age about 4 % of the selling price. The warranty liability a court has a credit balance of $13500 before adjustment. Customers returned merchandise for warra for repairs. The entry to record the customer warranty repairs is nty repairs during the month that used $10,100 in parts Mutiple Choice Debit warranty Expense $1U20 credit Estimated warranty Liability St 0. Debit Warranty Expense $14,520, credit Estimated Warranty Lisblity $14,520 Debit Estimated Warranty Liability $10,100, credit Parts Inventory $10,300 Debit Estimated Warranty Liability $14,520; credit Parts Inventory $14,520

Solution

The correct answer is option: - \"Debit Estimated Warranty Liability $10,100; credit Parts Inventory $10,100\".

Debit ($) Credit ($)

Estimated Warranty Liability 10,100

Parts Inventory   10,100

Customers have returned the merchandise for repairs, means the warranty has been done, hence the liability has been reversed.