Question - Digital Audio Works, Inc. warrants its product for 1 year. The estimated product warranty is 1.5% of sales. Assume tha sales were $975,000 for January. In February, a customer received warranty repairs requiring $5,280. of parts.
a. Determine the warranty liability at January 31, the end of the first month of the current year.
b. What accounts are decreased for the warranty work provided in February?