PROBLEM 3-6

Problem 3-6 (AICPA Adapted) 90-day unconditional warranty against product failure. The Precise Company sells an electric timer that carries, warranty costs of known failures have already been reflected in the records. Based on a reliable statistical analysis, 2% of units sold will October November December 28,000 Units sold 40,000 require an average cost of P150 per unit. 320 80 160 280 180 32,000 Known product failures from sales of: 160 October November December Required: Prepare a journal entry to record the estimated liability for warranty on December 31