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For the year ended December 31, Year 1, Health Company reported a $300,000 warranty expense in its income statement. The expense was based on actual
For the year ended December 31, Year 1, Health Company reported a $300,000 warranty expense in its income statement. The expense was based on actual warranty costs of $60,000 in Year 1 and expected warranty costs of $70,000 in Year 2, $80,000 in Year 3, and $90,000 in Year 4. Tax rates in effect are 20% for Year 1 and Year 2, and 15% for Year 3 and beyond. At December 31, Year 1, this difference will yield a
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