47. Exhibit 9-2

In 2015, the magtag company sold 16,000 ovens. Magtag estimated that 14% of the machines would require repairs under the two-year assurance-type warranty at an average cost of $60. During 2015, mag tag had an actual outlay of $62,000 for repairs under warranty. Magtag uses the GAAP approach of accusing warranty expense (and the related liability) in the year of the sale.

Referred to Exhibit 9-2. What amount should the company report for estimated liability under warranty is at the end of 2015?

A. $84,000

B. $48,000

C. $72,400

D. $62,000