Superior Sales Company offers warranties on all its electronic goods. Warranty expense is estimated at 3.5% of sales revenue. In 2018, Superior had sales of $333,000. In the same year, Superior replaced defective goods with merchandise inventory costing $8,750. Prepare the journal entry to record the warranty expense. Omit explanation.
What will be an ideal response?
Warranty Expense = 333,000 × 3.5% = $11,655
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