Lawrence Sales Corporation offers warranties on all their electronic goods
Warranty expense is estimated at 3% of sales revenue. In 2017, the company had $603,000 in sales. In the same year, Lawrence Sales replaced defective goods with a cost of $16,500. Which of the following is the entry needed to record the replacement of the defective goods?
A)
Estimated Warranty Payable 16,500
Merchandise Inventory 16,500
B)
Warranty Expense 16,500
Estimated Warranty Payable 16,500
C)
Warranty Expense 18,090
Estimated Warranty Payable 18,090
D)
Warranty Expense 18,090
Merchandise Inventory 18,090
A
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