Question

on december 1, home store sells a mower (that costs $120) for $420 cash with a one - year warranty that covers parts. warranty expense is estimated at 6% of sales. on january 24 of the following year, the mower is brought in for repairs covered under the warranty requiring $29 in materials taken from the parts inventory. prepare the december 1 entry to record the mower sale (and cost of sale), the december 31 adjusting entry for estimated warranty liability, and the january 24 entry to record the warranty repairs. note: round your answers to 2 decimal places. view transaction list journal entry worksheet < 1 2 3 4 record the mower sales. note: enter debits before credits. date general journal debit credit december 01

Explanation:

Step1: Record mower sale on December 1

Debit Cash for the selling price of $420, debit Cost of Goods Sold for the cost of $120, credit Sales Revenue for $420 and credit Inventory for $120.

Date	General Journal	Debit	Credit
	Sales Revenue		420.00
	Cost of Goods Sold	120.00
	Inventory		120.00

Step2: Adjust for estimated warranty liability on December 31

Estimated warranty expense is 6% of sales. So, $420\times0.06 = 25.20$. Debit Warranty Expense and credit Estimated Warranty Liability.

Date	General Journal	Debit	Credit
	Estimated Warranty Liability		25.20

Step3: Record warranty repairs on January 24

Debit Estimated Warranty Liability for the cost of materials $29 and credit Parts Inventory for $29.

Date	General Journal	Debit	Credit
	Parts Inventory		29.00

Answer:

The journal - entries are shown above in the step - by - step explanation for each transaction on December 1, December 31 and January 24.