D E G H ACCT 3102- FALL 2021 Operating Liabilities and Contingencies Klineman & Ross Company, Inc. is an accrual basis taxpayer, with a December 31, year end. Klineman & Ross Company, Inc. manufactures and distributes volleyball net systems that are able to convert to a badminton or tennis net system. The installations are tested in San Diego, California, to ensure the nets are able to withstand weather events. The aluminum uprights are adjustable, and Klineman & Ross is still conducting Research and Development so that the sliding collars, which adjust the net height, do not fail. Each net system is sold with an assurance-type warranty covering all parts and labor to protect against defects for a 1-year period. Customers have the option of purchasing an extended warranty for four additional years. All purchases and sales were recorded in cash (ignore sales tax). The company expects that the service-type warranty will be used 55% in the first year, and 15% in the subsequent years, Klineman & Ross Company's sales, estimated and actual costs are presented below: D E G H ACCT 3102- FALL 2021 Operating Liabilities and Contingencies Klineman & Ross Company, Inc. is an accrual basis taxpayer, with a December 31, year end. Klineman & Ross Company, Inc. manufactures and distributes volleyball net systems that are able to convert to a badminton or tennis net system. The installations are tested in San Diego, California, to ensure the nets are able to withstand weather events. The aluminum uprights are adjustable, and Klineman & Ross is still conducting Research and Development so that the sliding collars, which adjust the net height, do not fail. Each net system is sold with an assurance-type warranty covering all parts and labor to protect against defects for a 1-year period. Customers have the option of purchasing an extended warranty for four additional years. All purchases and sales were recorded in cash (ignore sales tax). The company expects that the service-type warranty will be used 55% in the first year, and 15% in the subsequent years, Klineman & Ross Company's sales, estimated and actual costs are presented below