End of Chapter Exercise 9.9 Benson Builder Pty Ltd provides a 12-month warranty on building...
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End of Chapter Exercise 9.9 Benson Builder Pty Ltd provides a 12-month warranty on building work performed by the entity. On 1 January 2016, there was a credit balance of $78,000 in its warranty provision account. During the year ended 31 December 2016, Benson Builder Pty Ltd incurred $82,600 servicing warranty claims. All of the warranty costs were in the form of labour costs. During the year ended 31 December 2016, Benson Builder Pty Ltd's revenue from building contracts was $7,650,000. Warranty liabilities are estimated as 1% of building revenue for the previous 12 months. Required Prepare journal entries to record warranty claims during the period and end-of-period adjustments to the warranty provision account. (Hint: credit wages payable for the labour costs.) (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Benson Builder Pty Ltd Journal entries Debit $ Credit $ Date Account and explanation 31 Dec. 2016 (To record work performed under warranty) 31 Dec. 2016
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