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Crane Inc. began selling game consoles on November $1,2024.$ The company offers a $60-$day warranty for defective merchandise.

Based on past experience with other similar products, Crane estimates that $2\mathrm{.}70\%$ of the units sold will become defective in the

warranty period, and that the average cost of replacing or repairing a defective unit is $$24.$ In November, Crane sold $32,000$ units and

$490$ defective units were returned. In December, Crane sold $36,000$ units and $670$ defective units were returned. The actual cost of

replacing the defective units was $$22,272.$

$($a$)$

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Prepare a journal entry to accrue for the estimated warranty costs for the November and December sales at December $31,2024.$

$($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No

Entry" for the account titles and enter $0$ for the amounts. List debit entry before credit entry.$)$

Date Account Titles

Debit

Credit

Dec. $31$

Warranty Expense

Warranty Liability

$($b$)$

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Prepare one summary journal entry at December $31,2024,$ to record the cost of replacing the defective game consoles returned

during November and December. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually.

If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List debit entry before credit entry.$)$

Date Account Titles

Debit

Credit

Dec. $31$

Warranty Expense

Warranty Liability

eTextbook and Media

List of Accounts

$($c$)$

What amounts will be included in Crane's $2024$ income statement and balance sheet at December $31,2024,$ with regard to the

warranty?

CRANE COMPANY

Income Statement $($Partial$)$

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