Which approach to the balance sheet should you adopt: when giving a warranty on the balance sheet of a company being sold? when forecasting a company's working capital?

Impact of warranty on the balance sheet.

• At the time of Sales : Debit Warranty Expense Account and Credit Warranty Liability Account
• As actual warranty claims occur debit the warranty liability account and credit the inventory account for the cost of the parts changed under warranty.

Forecasting a company's working capital:

From the Balance sheet, working capital is calculated as Account Receivables + Inventory - Account Payables