Problem: The auditor for Universal? Tools, Inc. discovered in 2023 that the warranty liability account showed a? $25,000 debit balance. She investigated and discovered that the? 2% estimate based on sales for warranty expense was recorded and? understated, and it was more likely? 3.5%. Sales for 2023 were? $5,750,000. What is the appropriate journal entry as a result of this? discovery? Question content area bottom Part
A. Warranty Liability ?86,250 Warranty Expense ?86,250
B. Warranty Liability 25,000 Warranty Expense 25,000
C. Warranty Expense ?86,250 Warranty Liability ?86,250
D. Warranty Expense ?201,250 Warranty Liability ?201,250