The Balance Sheet has accounts where the accountant must make estimates. Some situations in which estimates affect amounts reported in the balance sheet include:

Allowance for doubtful accounts.

Depreciable lives and estimated salvage values for plant and equipment.

Warranty returns.

Determining the amount of revenues that should be recorded as unearned.

select one of the four areas above and give a summary of how the estimate can impact the usefulness of the balance sheet.