I have been struggling with this problem for two days. Someone please help!

Accrued Product Warranty
General Motors Corporation disclosed estimated product warranty payable for comparative years as follows:


GM's sales were $177,594 million in 2007 and decreased to $147,732 million in 2008. Assume that the total paid on warranty claims during 2008 was $5,000 million.

Create the journal entry for the 2008 product warranty expense.

It won't let me edit my question and for some reason the table in the middle got deleted. The additional data (in millions) is as follows:

12/31/2008:
Current estimated product warranty payable: $3792
Noncurrent estimated product warranty payable: $4699

12/31/2007:
Current estimated product warranty payable: $4655
Noncurrent estimated product warranty payable: $4960

Quote:

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Originally Posted by Caspi

I have been struggling with this problem for two days. Someone please help!

Accrued Product Warranty
General Motors Corporation disclosed estimated product warranty payable for comparative years as follows:


GM's sales were $177,594 million in 2007 and decreased to $147,732 million in 2008. Assume that the total paid on warranty claims during 2008 was $5,000 million.

Create the journal entry for the 2008 product warranty expense.

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Well assuming, which Accountant's should never do, you would calculate the Warrant reserve needed by first referencing the Warranty Reserve in 2007. I note that number is not given so you don't know whether it was adequate or not, so not having this information I would maintain the reserve at its current level and expense the entire total of claims paid

What would the numbers in the journal entry be?

You need to develop these for yourself and I will comment on them