Question

Listed below are a few transactions and events of Maxum Company. 1. Employees earn vacation pay at a rate of one day per month. During December, 20 employees qualify for one vacation day each. Their average daily wage is $150 per employee. 2. During December, Maxum Company sold 3,700 units of a product that carries a 60-day warranty. December sales for this product total l $127,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $18. Prepare any necessary adjusting entries at December 31, 2017, for Maxum Company's year-end financial statements for each of the above separate transactions and events. View transaction list Journal entry worksheet Employees earn vacation pay at a rate of one day per month. During December, 20 employees qualify for one vacation day each. Their average daily wage is $150 per employee. Record the related adjusting entry. Note: Enter debits before credits

Answer 1

Journal Entries:
1)		Debit $	Credit $		Calculations
Debit	Vacation Expense	3000			150*20
Credit	Accrued Vacation Liability		3000
	(being accrued vacation liability made due)
2)
Debit	Warranty Expense	6660			3700*10%*$18
Credit	Accrued Warranty Liability		6660
	(being accrued warranty liability raised )