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[Music] now were going to work on exercise 11-21 which involves warranties so the accounting records of sculpted ceramics included the following at the beginning of the year so im going to click on here and then we get to see our liability account called estimated warranty payable and at the beginning of the year we have five thousand dollars in that account in our ledger so what this five thousand dollars represents is so apparently this sculpted ceramics company has a warranty on some of its products and if the product is broken or damaged you can bring it in and get it repaired or replaced and this five thousand dollars represents we think in the future will probably have to pay off five thousand dollars to fix or replace damaged goods that are under warranty for the products that we have sold in the past and also says in the past sculpted warranty sculpteds warranty expense has been nine percent of sale so for every hundred dollars of sales were going to have to pay about nine
