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Wu-Ling Manufacturing as part of its customer service offers a warranty on all goods manufactured....

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Accounting

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Wu-Ling Manufacturing as part of its customer service offers a warranty on all goods manufactured. The entity's Provision for warranty as at 30 June 2019 was $18,000. During the financial year 1 July 2019 to 30 June 2020. Wu-Ling Manufacturing made sales of $2,000,000 and expects product warranties to cost 1.5% of sales at 30 June 2020. During the 2019 - 2020 financial year, Wu-Ling Manufacturing paid $25,000 for warranties. There was an increase in sales by 65% in the 2019 - 2020 financial year compare to the last financial year. What is the journal entry to record the adjustment for the Provision for warranty at 30 June 2020 for Wu-Ling Manufacturing? O DR: Warranty expense $37,000, CR: Provision for Warranty $37.000 O DR: Warranty expense $61,050, CR: Provision for Warranty $61,050 O DR: Provision for Warranty $61,050, CR: Warranty expense $61.050 O DR: Provision for Warranty $37.000. CR: Warranty expense $37.000

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