E10.12 (LO 2) AP Silver Cloud manufactures and sells computers for $2,000 each, with a two-year...
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E10.12 (LO 2) AP Silver Cloud manufactures and sells computers for $2,000 each, with a two-year part and labour warranty. Based on prior experience, the company expects, on average, to incur warranty costs equal to 5% of sales. The business reports the following sales and warranty cost information: Sales (units) 2022 500 2023 600 2024 525 Actual Warranty Costs $30,000 46,000 53,500 Instructions a. Calculate the warranty expense for each year. b. Calculate the warranty liability at the end of each year. E16 E10.12 (LO 2) AP Silver Cloud manufactures and sells computers for $2,000 each, with a two-year part and labour warranty. Based on prior experience, the company expects, on average, to incur warranty costs equal to 5% of sales. The business reports the following sales and warranty cost information: Sales (units) 2022 500 2023 600 2024 525 Actual Warranty Costs $30,000 46,000 53,500 Instructions a. Calculate the warranty expense for each year. b. Calculate the warranty liability at the end of each year. E16
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