Shefford Cutlery extends a lifetime replacement warranty on all units sold. Using past experience, the company estimates that 0.5% of units sold will be returned and require replacement at an average cost of $108 per unit. On January 1, 2014, the balance in Shefford’s Estimated Warranty Liability account was $15,700. During 2014, sales totalled $3,610,000 or 15,200 units. The actual number of units returned and replaced was 77.
Record the replacement of the units returned in 2014 (use a date of December 31). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)