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#7 McKay Company sells merchandise with a 1-year warranty, In Vear 1 , sales consisted of 1,200 units. It is estimated that warranty repairs will

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McKay Company sells merchandise with a 1-year warranty, In Vear 1 , sales consisted of 1,200 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Vear 1 and 70% in Year 2. On the Vear 1 income statement, McKay should show warranty expense of a. $3,600 b. $0 c. $8,400 d. $12,000

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