The accounting records of Clay's Appliances included the following balances at the end of the...
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The accounting records of Clay's Appliances included the following balances at the end of the period: Accrued Warranty Payable Sales Revenue Warranty Expense Beg bal 2,000 120,000 In the past, Clay's warranty expense has been 7% of sales. During the current period, the business paid $4,000 to satisfy the warranty claims. Read the requirements. Requirement 1. Journalize Clay's warranty expense for the period and the company's cash payments to satisfy warranty claims. Explanations are not required. Start by journalizing the warranty expense. (Record debits first, then credits. Exclude explanations from journal entries.) Journal Entry Date Accounts Debit Credit Requirements 1. Journalize Clay's warranty expense for the period and the company's cash payments to satisfy warranty claims. Explanations are not required. 2. Show what Clay's will report on its income statement and balance sheet for this situation at the end of the period. 3. Which data item from requirement 2 will affect the current ratio? Will Clay's current ratio increase or decrease due to this item
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