The accounting records of Ernestown Electric Inc. (EE) included the following balances before the year end adjustments: Estimated warranty liability...

The accounting records of Jansen Inc. included the following balances before the year end adjustments:

Estimated warranty                 liability Sales revenue      Warranty expense            

                   | 11,000                                              | 180,000                                 |

In the past, Jansen's Inc. warranty expense has been 3% of sales. During the current period, the business paid $6,300 to satisfy the warranty claims of customers.

Required:

.   a) Record Jansen's Inc. warranty expense for the period and the company’s payments to satisfy warranty claims 


.   b) Show what Jansen Inc. will report on its income statement and balance sheet for this situation (show supporting calculations) 


.   c) Which item from part (b) will affect Jansen's current ratio? Will Jansen's Inc. current ratio increase or decrease as a result of this item?