Das 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 $14 million and actual warranty expenditures were $26,500 for the first year of selling the product. Complete the following T- account to determine the amount (if any) Das should report as a liability at the end of the year. Note: Enter your answers in whole dollars.

Das 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 $14 million and actual warranty expenditures were $26,500 for the first year of selling the product. Complete the following T- account to determine the amount (if any) Das should report as a liability at the end of the year. Note: Enter your answers in whole dollars.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Das 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 2% of sales. Sales were $21 million and actual warranty expenditures were $31,750 for the first year of selling the product. Complete the following T-account to determine the amount (if any) Das should report as a liability at the end of the year. Note: Enter your answers in whole dollars. Beginning Balance Ending Balance Debit Warranty Liability Credit