During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2021 and 2022 are as follows:   Sales  Actual Warranty Expenditures 2021 P   800,000 P12,000 2022 1,000,000   30,000   P1,800,000 P42,000 At December 31, 2022, Eaton should report an estimated warranty liability of

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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During 2021, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2021 and 2022 are as follows:

  Sales  Actual Warranty Expenditures
2021 P   800,000 P12,000
2022 1,000,000   30,000
  P1,800,000 P42,000

At December 31, 2022, Eaton should report an estimated warranty liability of

 
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