Response to the following :
Repairs under Warranty
Refer to the data in problem. Assume that during the following year, 20 customers bring in 80 tires for warranty repairs. The labor and supplies associated with these repairs were $900 and $350, respectively. Make the journal entry necessary to record the performance of these warranty services.
Problem:
Warranty Expense
The company has determined, based on past experience, that 15% of all tires sold will need repairs within the warranty period. When customers request a tire repair under the warranty agreement, each visit costs an average of $20 in parts and labor. The company sold 600 tires during the year. Make the journal entry necessary to record warranty expense for the year.