Felix Sales, Inc offers warranties on all its electronic goods
Warranty expense is estimated at 3.5% of sales revenue. In 2017, Felix had sales of $333,000. In the same year, Felix replaced defective goods with merchandise inventory costing $8,750. Prepare the journal entry to record the warranty expense.
What will be an ideal response
Warranty Expense 11,655
Estimated Warranty Payable 11,655 .Warranty Expense = 333,000 x 3.5% = $11,655
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