Question

. how much total estimated warranty expense does arctica report for the current year? 2. record the adjusting entry at year-end of the current year to recognize warranty expense. 3. a customer brings in a snowmobile for warranty repairs on january 15 of the following year and the replacement parts cost $700. record the journal entry for this repair.

Answer 1

To determine the total estimated warranty expense, review Arctica's financial statements. Record an adjusting entry at year-end to recognize the warranty expense. Make a journal entry to record the warranty repair.

• To determine the total estimated warranty expense, Arctica's financial statements need to be reviewed.
• Specifically, the notes to the financial statements should provide information about the amount of warranty expense recognized during the current year.
• This information is usually disclosed in the footnotes related to accounting policies or significant estimates.
• Once the total estimated warranty expense is known, an adjusting entry can be recorded at the year-end.
• This entry typically includes debiting the Warranty Expense account and crediting the Estimated Warranty Liability account.
• On January 15 of the following year, when a customer brings in a snowmobile for warranty repairs and the replacement parts cost $700, a journal entry can be made to record this repair.
• This entry usually involves debiting the Estimated Warranty Liability account and crediting the Inventory or Cost of Goods Sold account, depending on the nature of the repair.