a Search the web mann University Onl × y D Ch.13 homework ezto.mheducation.com/h

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a Search the web mann University Onl × y D Ch.13 homework ezto.mheducation.com/hm.tpx Question 6 (of 6) value: 700 points Right Medical introduced a new implant that carries a five-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to approximate 1% of sales Sales were $24 million and actual warranty expenditures were $40,250 for the first year of selling the product. What amount (if any) should Right report as a liability at the end of the year? (Enter your answers in whole dollars.) Warranty Liability Beg. Bal Warranty expense Actual expenditures End Bal References eBook & Resources Worksheet 0 Type here to search

Explanation / Answer

Warranty is given for the 5 years So it means against sale of $ 24 Million , warranty payable is for 5 years Provission of warranty Expenses = 1% of $ 24,000,000 = $          2,40,000 WARRANTY LIABILITY Beg . Balance $                       -   Add: warranty Liability of the year = $    2,40,000.00 Less: Warranty Expenses paid for the year = $        40,250.00 Ending Balance of Warranty Liability $    1,99,750.00 Actual Expenditure for the year= $        40,250.00 Ending Balance of warranty Liability $    1,99,750.00

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