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8 Linen Ltd commenced business operations on 1 July 2018 and sells electronic products with a two (2) year warranty that is effective from the
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Linen Ltd commenced business operations on 1 July 2018 and sells electronic products with a two (2) year warranty that is effective from the date of sale. Linen Ltd's management accountant recently provided the following the information about the expected warranty repairs in relation to total sales for the year ended 30 June 2019 and 2020. FY FY 2019 2020 529075 947753 958831 863705 50% 60% 30% 25% 10% 25% Estimated cost of minor defect repairs for total sales during the year Estimated cost of major defect repairs for total sales during the year Estimated % of products sold during the year having no defects Estimated % of products sold during the year having minor defects Estimated % of products sold during the year having major defects Expected timing for settlement of warranty payments for minor defects - 2020 -2021 -2022 Expected timing for settlement of warranty payments for major defects - 2020 -2021 -2022 65% na 35% 40% na 60% 50% na 50% 90% 10% na The effect of discounting is considered to be immaterial. What is the current portion of the provision for warranties at 30 June 2020? PLEASE ENTER YOUR ANSWER IN WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWN AS 1000000)Step by Step Solution
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