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A new product introduce by Gabrielle Promotions carries a two-year warranty against defects. The estimated warranty costs related to sales are as follows: Year of
A new product introduce by Gabrielle Promotions carries a two-year warranty against defects. The estimated warranty costs related to sales are as follows: Year of sale - 3%; Year after sale - 5% Sales and actual warranty expenditures for the years ended December 31, 2019 and 2020 are as follows: 2019 2020 Sales P 800,000 1,000,000 Actual Warranty Expenditures P 20,000 70,000 What amount should Gabrielle report as its estimated liability as of December 31, 2020
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