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Please provide work and answer in spreadsheet format. Thank you! 2. ABC Corp began operations on 1/01/18 and has a fiscal year end of 12/31.
Please provide work and answer in spreadsheet format. Thank you!
2. ABC Corp began operations on 1/01/18 and has a fiscal year end of 12/31. ABC rebuilds transmissions and provides a 12 month warranty on all its work. ABC estimates that warranty performance cost will be approximately 2.5% of revenue. During 2018, ABC rebuilds transmissions and charges customers a total of $500,000. Also during 2018, ABC performed warranty work, incurring costs totaling $6,400 to complete the warranty work. Based on the information above: A. What the amount of warranty expense should appear on ABC's 12/31/18 income statement Determine the amount of estimated warranty liability to appear in the 12/31/18 balance sheet. BStep by Step Solution
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