S11-11 Accounting for warranty expense and warranty payable Learning Objective 3 Trail Runner guarantees its snowmobiles for three years. Com- pany experience indicates that warranty costs will be approxi- mately 5% of sales. Assume that the Trail Runner dealer in Colorado Springs made sales totaling $600,000 during 2018. The company received cash for 20% of the sales and notes receivable for the remain- der. Warranty payments totaled $10,000 during 2018