Hi-Tech Company Produces Widgets That Cost $60 Each and Have $\begin{array}{llr} \text { Product Warranty Expense } &300\\ \text { Estimated Product Warranty Liability } &&300\\\end{array}$

Multiple Choice

Hi-Tech Company produces widgets that cost $60 each and have a 5 percent failure rate.If 500 widgets are sold,the entry to record the estimated product warranty expense would be

A)
$\begin{array}{llr} \text { Product Warranty Expense } &300\\ \text { Estimated Product Warranty Liability } &&300\\\end{array}$

B)
$\begin{array}{llr} \text { Product Warranty Expense } & 1,500\\ \text { Estimated Product Warranty Liability} && 1,500\\\end{array}$

C)
$\begin{array}{llr} \text { Product Warranty Expense} &150\\ \text { Cash } &&150\\\end{array}$

D)
$\begin{array}{llr} \text { Estimated Product Warranty Liability } &75\\ \text { Cash } &&75\\\end{array}$