during december, vixen company sells $855,000 in merchandise that has a one - year warranty. warranty…

during december, vixen company sells $855,000 in merchandise that has a one - year warranty. warranty expense is estimated at 4% of sales. on january 5 of the following year, the merchandise requires repairs that are completed the same day. the repairs cost $14,500 for materials taken from parts inventory. the entry to record the repairs that occur on january 5 is: multiple choice debit warranty expense $19,700; credit estimated warranty liability $19,700. debit estimated warranty liability $34,200; credit warranty expense $34,200. debit warranty expense $14,500; credit estimated warranty liability $14,500. debit estimated warranty liability $19,700; credit parts inventory $19,700. debit estimated warranty liability $14,500; credit parts inventory $14,500.

during december, vixen company sells $855,000 in merchandise that has a one - year warranty. warranty expense is estimated at 4% of sales. on january 5 of the following year, the merchandise requires repairs that are completed the same day. the repairs cost $14,500 for materials taken from parts inventory. the entry to record the repairs that occur on january 5 is: multiple choice debit warranty expense $19,700; credit estimated warranty liability $19,700. debit estimated warranty liability $34,200; credit warranty expense $34,200. debit warranty expense $14,500; credit estimated warranty liability $14,500. debit estimated warranty liability $19,700; credit parts inventory $19,700. debit estimated warranty liability $14,500; credit parts inventory $14,500.

Answer

Explanation:

Step1: Understand warranty accounting

When repairs occur, we use the estimated warranty liability account set - up earlier. The cost of repairs is debited to the estimated warranty liability and credited to the parts inventory.

Step2: Identify the cost of repairs

The repairs cost $14,500 for materials taken from parts inventory. So, we debit the estimated warranty liability for $14,500 and credit the parts inventory for $14,500.

Answer:

Debit Estimated Warranty Liability $14,500; credit Parts Inventory $14,500.