Question
An entity provides a two-year warranty on its products. Based on past history, they estimate that warranty costs will be equal to 1.9% of the
An entity provides a two-year warranty on its products. Based on past history, they estimate that warranty costs will be equal to 1.9% of the product cost in the first year and 2.9% of the product cost in the second year of the warranty. The opening balance in the warranty liability account was $154538. Total sales for the current year amounted to $13095895. Jamiesons gross margin is 40%. Total costs incurred to service warranties for the current year amounted to $116811. What is the balance in the warranty liability account at the end of the year.
Select one:
a. $116811
b. $260351
c. $414889
d. $377162
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