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Heinrich Tire Company began offering a three-year warranty on its products at the beginning of 2022. The warranty program was expected to cost Heinrich 5% of net sales. Net sales made under warranty in 2022 were $192 million. Twelve percent of the units sold were returned in 2022 and repaired or replaced at a cost of $4.40 million. How much warranty expense should Heinrich report in its 2022 Income statement? Multiple Choice OOO O $28.80 million. $4.40 million. $13.00 million. $9.60 million

Heinrich Tire Company began offering a three-year warranty on its products at the beginning of 2022. The warranty program was expected to cost Heinrich 5% of net sales. Net sales made under warranty in 2022 were $192 million. Twelve percent of the units sold were returned in 2022 and repaired or replaced at a cost of $4.40 million. How much warranty expense should Heinrich report in its 2022 Income statement? Multiple Choice OOO O $28.80 million. $4.40 million. $13.00 million. $9.60 million

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Heinrich Tire Company began offering a three-year warranty on its products at the beginning of 2022. The warranty program was expected to cost Heinrich 5% of net sales. Net sales made under warranty in 2022 were $192 million. Twelve percent of the units sold were returned in 2022 and repaired or replaced at a cost of $4.40 million. How much warranty expense should Heinrich report in its 2022 Income statement? Multiple Choice $28.80 million. $4.40 million. $13.00 million. $9.60 million.
Transcribed Image Text:Heinrich Tire Company began offering a three-year warranty on its products at the beginning of 2022. The warranty program was expected to cost Heinrich 5% of net sales. Net sales made under warranty in 2022 were $192 million. Twelve percent of the units sold were returned in 2022 and repaired or replaced at a cost of $4.40 million. How much warranty expense should Heinrich report in its 2022 Income statement? Multiple Choice $28.80 million. $4.40 million. $13.00 million. $9.60 million.
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