Company Z manufactures printers, which comes with one-year warranty. During this year, Company Z sold 51,000 units of printers for $510,000 of total revenues. The company estimates that it will cost the company $150 in warranty costs for every unit sold. At the beginning of this year, Company Z reported a liability for estimated warranty costs of $1,000,000. During the year, the company paid $850,000 in warranty claims filed by customers for printers they had bought. At the end of year, what would be the total warranty liability reported on the balance sheet?
Company Z manufactures printers, which comes with one-year warranty. During this year, Company Z sold 51,000 units of printers for $510,000 of total revenues. The company estimates that it will cost the company $150 in warranty costs for every unit sold. At the beginning of this year, Company Z reported a liability for estimated warranty costs of $1,000,000. During the year, the company paid $850,000 in warranty claims filed by customers for printers they had bought. At the end of year, what would be the total warranty liability reported on the balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Company Z manufactures printers, which comes with one-year warranty. During this year, Company Z sold 51,000 units of printers for $510,000 of total revenues. The company estimates that it will cost the company $150 in warranty costs for every unit sold. At the beginning of this year, Company Z reported a liability for estimated warranty costs of $1,000,000. During the year, the company paid $850,000 in warranty claims filed by customers for printers they had bought. At the end of year, what would be the total warranty liability reported on the
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