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During 2017, Blevert Co. introduced a new line of machines that carry a three-year warranty against manufacturer's defects. Based on industry experience, warranty costs are
During 2017, Blevert Co. introduced a new line of machines that carry a three-year warranty against manufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales. Actual Warranty Expenditures 2017 $700,000. $5,000 2018 $1,300,000. $23,000 2019 $2,100,000. $100,000 ______________________________________________ $4,100,000. $128,000 What amount should Blevert report as a liability at Dec 31, 2018? a. $133,000 b. $235,000 c. $212,000 d. $156,000
Sales. Actual Warranty Expenditures
2017 $700,000. $5,000
2018 $1,300,000. $23,000
2019 $2,100,000. $100,000
______________________________________________
$4,100,000. $128,000
What amount should Blevert report as a liability at Dec 31, 2018?
a. $133,000
b. $235,000
c. $212,000
d. $156,000
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