Question: Accounting for warranty expense and warranty payable The accounting records of Sculpted Ceramics included the following at January 1, 2016:
Estimated warranty payable 3,000 Beg. Bal.
In the past, Earth and Clay's warranty expense has been 9% of sales. During 2016, Earth and Clay made sales paid $124,000 and paid $8,000 to satisfy warranty claims.
Requirements: 1. Journalize Earth and Clay's warranty expense and warranty payments during 2016. Explanations are not required.
2. What balance of Estimated Warranty Payable will Earth and Clay report on its balance sheet at December 31, 2016?