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Exhibit 9-5 Backhoe Company estimates its annual warranty costs to be 4% of annual net sales, Backhoe uses the GAAP approach of accruing warranty expense

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Exhibit 9-5 Backhoe Company estimates its annual warranty costs to be 4% of annual net sales, Backhoe uses the GAAP approach of accruing warranty expense and the related liability) in the year of the sale. The following information relates to the calendar year 2019 Net sales $3,000,000 Estimated liability under warranties: January 1, 2019 100,000 December 31, 2019, after year-end adjustment 80,000 19. Refer to Exhibit 9-5. The amount of expenditures for warranty costs for 2019 is $80,000 b. $120,000 $140,000 $240,000 d

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