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Manila Co. prepares quarterly interim FS reports. The entity sells electrical goods and normally 5% of customers claim on their warranty. The provision in the

Manila Co. prepares quarterly interim FS reports. The entity sells electrical goods and normally 5% of customers claim on their warranty. The provision in the first quarter was calculated at 5% of sales to date which amounted to 10,000,000. However, in the second quarter, a design fault was found and warranty claims were expected to be 10% for the whole year. sales for the second quarter amounted to 15,000,000. What amount of provision should be charged in the second quarters interim income statement?

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