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Employees earn vacation pay at a rate of one day per month. During December, 35 employees qualify for one vacation day each. Their average daily wage is $160 per employee. During December, Maxum Company sold 4,500 units of a product that carries a 60-day warranty. December sales for this product total $125,000. The company expects 7% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $10. Prepare any necessary adjusting entries at December 31, 2017, for Maxum Company’s year-end financial statements for each of the above separate transactions and events.
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