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Cullumber Company offers a five-year warranty on its products. Cullumber previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate
Cullumber Company offers a five-year warranty on its products. Cullumber previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate to 1% due to process and quality control improvements. Cullumber reported warranty costs of $79200 on $2640000 in 2023 and $94200 on $3140000 in 2024 . Sales revenue for 2025 was $5280000. What is the adjustment to Retained Earnings in 2025 (ignore income tax considerations)? $0$117000$64200$52800
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