Classical’s products carry a one-year warranty against manufacturer’s defect

Classical’s products carry a one-year warranty against manufacturers defects. Based on previous experience, warranty costs are expected to approximate 4% of
sales. Sales were $2 million (all credit) for 2013. Actual warranty expenditures were $30,800 and were recorded as warranty expense when incurred. What would be
the year end entry for this contingency?

Classical’s products carry a one-year warranty against manufacturers defects. Based on previous experience, warranty costs are expected to approximate 4% of
sales. Sales were $2 million (all credit) for 2013. Actual warranty expenditures were $30,800 and were recorded as warranty expense when incurred. What would be
the year end entry for this contingency?

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