Buffalo,Inc

Multiple Choice

Buffalo,Inc.reported sales revenue for 2017 of $911,000.The products were sold with a nine-month warranty.Members of Buffalo's management estimate that the cost of the warranty will be equal to 9% of sales revenue.Which of the following will be included in the entry to record the actual amounts paid out as a result of warranty claims?

A) a debit to Estimated Warranty Payable for the actual amount of payments
B) a credit to Estimated Warranty Payable for $81,990
C) a debit to Estimated Warranty Payable for $81,990
D) a debit to Warranty Expense for the actual amount of payments