During 2019, Namnama Company introduced a new product carrying a two-year warranty against defects The estimated warranty costs related to peso sales are 4% within 12 months following sales and 6% in the second 12 months following sale. The entity reported sales of 5,000,000 for 2019 and 6,000,000 for 2020. The actual expenditures incurred amounted to 150,000 for 2019 and 550,000 for 2020 O 500,000 O 200,000 O 250,000 O 300,000
During 2019, Namnama Company introduced a new product carrying a two-year warranty against defects The estimated warranty costs related to peso sales are 4% within 12 months following sales and 6% in the second 12 months following sale. The entity reported sales of 5,000,000 for 2019 and 6,000,000 for 2020. The actual expenditures incurred amounted to 150,000 for 2019 and 550,000 for 2020 O 500,000 O 200,000 O 250,000 O 300,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 10E
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What amount should be reported as warranty expense for 2019?
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