Other accrued liabilitieswarranties Prist Co. had not provided a warranty on

its products, but competitive pressures forced management to add this feature at the

beginning of 2013. Based on an analysis of customer complaints made over the past

two years, the cost of a warranty program was estimated at 0.3% of sales. During

2013, sales totaled $3,450,000. Actual costs of servicing products under warranty

totaled $9,700.

Required:

a. Use the horizontal model (or a T-account of the Estimated Warranty Liability) to

show the effect of having the warranty program during 2013.

b. What type of accrual adjustment should be made at the end of 2013?

c. Describe how the amount of the accrual adjustment could be determined.

(I am not too certain which numbers go where in the horizontal model, but I do not understand that last two questions)