Question
Kaila Company sells computers with a 6-month warranty. It is estimated that 2% of all units sold will need repairs under warranty at an estimated
Kaila Company sells computers with a 6-month warranty. It is estimated that 2% of all units sold will need repairs under warranty at an estimated cost of $600 per unit. During January, the company sold 100,000 computers at $5,250 each, and 1,500 computers were turned in for repairs during that same month. The total actual repairs costs amounted to $555,000 from the computer parts inventory. The balance in the Estimated Warranty Liability Account on January 1 was $45,000. What is the balance in the Estimated Warranty Liability Account at the end of January 2019?
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