During July,Audio City Sold 200 Radios for $50 Each

During July,Audio City sold 200 radios for $50 each.Each radio had cost Audio City $30 to purchase and carried a two-year warranty.If 5 percent typically need to be replaced over the warranty period and one actually is replaced during July,the entry to record the Product Warranty Expense is:

A) Product Warranty Expense 30
Estimated Product Warranty Liability 30
B) Product Warranty Expense 150
Cash 150
C) Product Warranty Expense 300
Estimated Product Warranty Liability 300
D) Estimated Product Warranty Liability 600
Product Warranty Expense 600

Correct Answer:

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