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Sandhill Inc. began selling game consoles on November 1, 2024. The company offers a 60-day...

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Accounting

Sandhill 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, Sandhill estimates that 2.40% of the units sold will become defective in the warranty period, and that the average cost of replacing or repairing a defective unit is $20. In November, Sandhill sold 30,000 units and 450 defective units were returned. In December, Sandhill sold 65,000 units and 600 defective units were returned. The actual cost of replacing the defective units was $16,800. Prepare a journal entry to accrue for the estimated warranty costs for the November and December sales at December 31, 2024.

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