Bramble Lane Outfitters Ltd. sold $340,000 of gear this year under a one-year warranty. Experience says claims cost 2 % of sales. Record the year-end warranty accrual.

Answer

Dr Warranty Expense 6800; Cr Warranty Liability 6800

Accounts - Warranty Expense - Warranty Liability - Cash - Inventory - Sales Revenue 2 % × 340,000 = **6,800**: **Warranty Expense** (debit) — the cost belongs to this year’s sales — and **Warranty Liability** (credit), an estimated liability. The trap is waiting for the claims: that puts next year’s expense against the wrong sales and leaves no liability at year end.

Hermanson Vol 1 ch 9 (warranty accrual — shape adapted; its US three-tier vocabulary is not used); Lyryx Intermediate FA Vol 1 §4.2; Dauderis & Annand §9.3; verified-facts.md V11 (s.3290 — likely and estimable → accrue; range → minimum; warranties outside s.3290; likely gains disclosed, never accrued) (concept map L8–L9)