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Best Automotive Limited guarantees automobiles against defects for five years or 160,000 km, whichever comes first. Suppose BA can expect warranty costs during the five-year period to add up to 8% of sales. Assume that Valley Motors in London, Ontario, made sales of $2,100,000 on its passenger line during 2017. Valley received cash for 10% of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totalled $45,000 during 2017. 1. Record the sales, warranty expense, and warranty payments for Valley. Ignore any reimbursement that Valley may receive from BA 2. Post to the Estimated Warranty Payable T-account. The beginning balance was $43,000. At the end of 2017, how much in estimated warranty payable does Valley owe its customers? 1. Record the sales, warranty expense, and warranty payments for Valley. Ignore any reimbursement that Valley may receive from BA. First, let's record the sale of automobiles. (Record debits first, then credits. Explanations are not required.) Journal Entry Accounts Debit Credit Now, let's accrue the warranty expense. Journal Entry Accounts Debit Credit Next, we will record the payment of warranty expenses Journal Entry Debit Accounts Credit 2. Post to the Estimated Warranty Payable T-account. The beginning balance was $43,000. At the end of 2017, how much in estimated warranty payable does Valley owe its customers? Select the appropriate descriptions, enter the beginning balance, post the entries, and calculate the ending balance of the Estimated Warranty Payable account. (Leave any unused cells blank.) Estimated Warranty Payable

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