Question
A new product introduced by Arthur Corp. carries a two-year warranty against defects. The estimated warranty costs related to sales revenue are as follows: Year
A new product introduced by Arthur Corp. carries a two-year warranty against defects. The estimated warranty costs related to sales revenue are as follows: Year of sale 3% Year after sale 5% Sales and actual warranty expenditures for the years ended 12/31/20A1 and 12/31/20A2 are as follows: Year Sales Actual Warranty Expenditures 20A1 $ 400,000 $ 10,000 20A2 500,000 $ 33,000 What amount should Arthur report as Warranty Expense for the year ended 12/31/20A2 and as Estimated Warranty Liability at 12/31/20A2? Warranty Expense Est. Warranty Liability
Group of answer choices
$ 40,000 $ 29,000
$ 35,000 $ 4,000
$ 35,000 $ 22,000
$ 33,000 $ 7,000
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