For the year 2024, how much is ABCs net profit from warranty contracts?
11. ABC Company sells televisions at an average price of P15,000 and also offers a separate 2-year warranty contract for P2,000 that requires the entity to perform periodic services and replace defective parts. In 2022, ABC sold 550 television sets and 400 extended warranty contracts for cash. The entity estimates the two-year warranty costs as P1,200 for parts and P600 for labor and accounts for warranties separately. The sale occurred on December 31, 2022. The entity recognizes income from the warranties based on the actual warranty availed by the customers within the warranty period. Expired warranties are closed to income from warranties. In 2023, 30% of sold warranties were availed by customers, and in the year 2024, only 80% of the remaining warranty contracts were availed. For the year 2024, how much is ABCs net profit from warranty contracts?
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