Question
Use the following information for the next two questions: Doberman Incorporated started selling iPad with a four-year warranty against factory defects in 2018. Estimated warranty
Use the following information for the next two questions: Doberman Incorporated started selling iPad with a four-year warranty against factory defects in 2018. Estimated warranty costs related to pesos sales are as follows: 1% of sales in the year of sale, 2% of sales in the year after sale, 4% of sales two years after sale and 7% of sales three years after sale. Information relating to sales and actual warranty expenditures for the year 2018 through 2021 is as follows:
Year
Sales
Actual Warranty Expenditure
2018
3,280,000
110,600
2019
4,320,500
200,480
2020
4,585,800
310,690
2021
5,320,300
400,480
How much is the warranty expense in 2020?
How much is the estimated liability for warranty at December 31, 2021?
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