Catskills Connectors sell industrial equipment to an array of business and suppliers. Catskills Connectors provides a guarantee on its equipment for 3 years.

Company experience indicates that 7% of sales will require warranty service.

An Albany area dealer made sales during 2020 totaling $686,000.

The company received cash for 10% of the sales and notes receivable for the remainder.

Warranty payments for 2020 totaled $31,000, of which wages accounted for 81% of the costs and supplies for the remainder.

1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold.

Journal

Date	Description	Debit	Credit
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense
	A/PA/RCashEst. Warranty PayableFees EarnedNotes PayableNotes ReceivableRepair ExpenseSales RevenueSuppliesWages PayableWarranty Expense

2. Post to the Estimated Warranty Payable T account. At the end of 2020, how much in Estimated Warranty Payable does the company owe? 

Assume the Estimated Warranty Payable is $2,200 on January 1, 2020.

Estimated Warranty Expense

Debit	Credit
Double line	Double line