Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor. 1. The amount reported as warranty expense in 2021 is 2. The amount reported under Estimated warranty obligation is
Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor. 1. The amount reported as warranty expense in 2021 is 2. The amount reported under Estimated warranty obligation is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Everdeen Company sells computers for P20,000 eachand also gives each customer a 3-year warranty that requires the company to perform periodic servicesand to replace defective parts. During 2021, the company sold 5—computers. Based on experience, the company has estimated the total 3-year warranty costs as P120 for parts and P150 for labor. In 2021, Everdeen Company incurred actual warranty costs relative to 2021 computer sales of P5,400 for parts and P12,600 for labor.
1. The amount reported as warranty expense in 2021 is
2. The amount reported under Estimated warranty obligation is
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