Entity A manufactures high-end home electronics systems. The entity provides a one-year warranty for all products sold. The entity estimated that the warranty cost is P200 per unit sold and reported a liability for estimated warranty cost of P650,000 at the beginning of the year. The entity sold 5,000 units for a total of P9,000,000 and paid warranty claims of P750,000 on current and prior year sales during the current year. What about should be reported as warranty liability at year-end? 350,000 250,000 750,000 900,000
Entity A manufactures high-end home electronics systems. The entity provides a one-year warranty for all products sold. The entity estimated that the warranty cost is P200 per unit sold and reported a liability for estimated warranty cost of P650,000 at the beginning of the year. The entity sold 5,000 units for a total of P9,000,000 and paid warranty claims of P750,000 on current and prior year sales during the current year. What about should be reported as warranty liability at year-end? 350,000 250,000 750,000 900,000
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 34E
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Question
Entity A manufactures high-end home electronics systems. The entity provides a one-year warranty for all products sold.
The entity estimated that the warranty cost is P200 per unit sold and reported a liability for estimated warranty cost of P650,000 at the beginning of the year.
The entity sold 5,000 units for a total of P9,000,000 and paid warranty claims of P750,000 on current and prior year sales during the current year.
What about should be reported as warranty liability at year-end?
-
350,000
-
250,000
-
750,000
-
900,000
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