(Answered) Question - cullumber factory provides a 2-year warranty

Accounting

Question - Cullumber Factory provides a 2-year warranty with one of its products which was first sold in 2017. Cullumber sold $905,400 of products subject to the warranty. Cullumber expects $117,280 of warranty costs over the next 2 years. In that year, Cullumber spent $65,340 servicing warranty claims.

Prepare Cullumber's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.

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