Note 3 - Warranty A car dealer also owns a workshop that it uses for servicing cars under warranty. In preparing its financial statements, the car dealer needs to ascertain the provision of warranty that it would be required to provide at year-end. The entity's past experience with warranty claims is: 55% of cars sold in a year have zero defects. 40% of cars sold in a year have normal defects. 5% of cars sold in a year have significant defects. The cost of rectifying a "normal defect in a car is GH50,000. The cost of rectifying a "significant defect" in a car is GH75,000. Required Compute the amount of provision for warranty needed at year-end. (4 marks) Note 3 - Warranty A car dealer also owns a workshop that it uses for servicing cars under warranty. In preparing its financial statements, the car dealer needs to ascertain the provision of warranty that it would be required to provide at year-end. The entity's past experience with warranty claims is: 55% of cars sold in a year have zero defects. 40% of cars sold in a year have normal defects. 5% of cars sold in a year have significant defects. The cost of rectifying a "normal defect in a car is GH50,000. The cost of rectifying a "significant defect" in a car is GH75,000. Required Compute the amount of provision for warranty needed at year-end. (4 marks)