Multiple Choice
Sales revenue for Booker Company for 2019 amounted to $800,000. The products sold carry a six-month warranty. Management estimates the cost of the warranty to be 3% of sales revenue. Booker should:
A) debit Warranty Expense in 2019 for $24,000.
B) debit Estimated Warranty Payable in 2019 for $24,000.
C) debit Warranty Expense when the products are repaired or replaced in either 2019 or 2020.
D) credit Estimated Warranty Payable in either 2019 or 2020 when the products are repaired or replaced.
Correct Answer:
Verified
Correct Answer:
Verified
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