Interpreting Warranty Liability Disclosures The following disclosures were provided by Siemens AG in its 2018 annual report: Product-related expenses Provisions for estimated costs related to product warranties are recorded in line item Cost of sales at the time the related sale is recognized, and are established on an individual basis, except for the standard product business. The estimates reflect historic experience of warranty costs, as well as information regarding product failure experienced during construction, installation or testing of products. In the case of new products, expert opinions and industry data are also taken into consideration in estimating product warranty provisions. Note 23 Provisions (in millions) Beginning balance Additions Usage Reversals Provisions for Warranties Year ended Sept. 30 2018 2017 4,632* 4,249 1,786 1,820 (993) (1,160) (928) (972) 78 (694) 4,575 4,631 Translation differences and other Ending balance *Beginning balance adjusted in the 2018 annual report. The Provision that Siemens reports is an estimated warranty liability. What would constitute additions to the provision? Prepare a journal entry to record this addition. General Journal Description Debit - Credit What constitutes "usage" of the provision? Besides the provision, what other accounts are likely to be affected by usage? Prepare a journal entry to record usage of 993 million in 2018. General Journal Description Debit Credit Siemens reported sales revenue of 83,044 million in 2018 and 82,863 in 2017. Calculate the ratio of warranty expense to sales for each year. Round to one decimal place (i.e., 5.6%) 2018 % 2017 %