Answer:
Explanation:
1. The journal entries are shown below:
Cash A/c Dr $240,000 ($800,000 × 30%)
Notes receivable ($800,000 × 70%)
To Sales revenue A/c $560,000
(Being the sales is recorded)
Warranty expense A/c Dr $36,000 ($600,000 × 6%)
To Inventory A/c $36,000
(Being the warranty expense is recorded)
Warranty payable A/c Dr $32,000
To Cash A/c $32,000
(Being the warranty payment is recorded)
2. The Estimated Warranty Payable T-account is presented below
Particulars Amount Particulars Amount
Warranty expense $36,000 Beginning balance $0
Cash $32,000
Ending balance $4,000
