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Question(s) / Instruction(s):

A company estimates that warranty expense will be 4% of sales. The company\'s sales for the current period are $185,000. The current period\'s entry to record the warranty expense is:

a)              Warranty Liability.................................               7,400      

        Cash............................................                   7,400 

b)            No entry is recorded until the items are returned for warranty repairs.

c)            Warranty Expense................................                7,400      

        Sales............................................                  7,400 

d)            Estimated Warranty Liability...................              7,400      

        Estimated Warranty Expense...........                              7,400

e)            Warranty Expense.................................               7,400      

        Estimated Warranty Liability.............                             7,400 

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