On April 1, 2021, Carter Company began offering a new product for sale under a one-year warranty. Of the 5,000 units in inventory on April 1, 2021, 3,000 had been sold by June 30, 2021. Based on its experience with similar products, the entity estimated that the average warranty cost per unit sold would be P160. Actual warranty costs incurred from April 1 through June 30, 2021 were P140.000. On June 30, 2021, the amount to be reported as warranty liability is: a. 180,000 $340,000 b. $240,000 P660,000 C. d.
On April 1, 2021, Carter Company began offering a new product for sale under a one-year warranty. Of the 5,000 units in inventory on April 1, 2021, 3,000 had been sold by June 30, 2021. Based on its experience with similar products, the entity estimated that the average warranty cost per unit sold would be P160. Actual warranty costs incurred from April 1 through June 30, 2021 were P140.000. On June 30, 2021, the amount to be reported as warranty liability is: a. 180,000 $340,000 b. $240,000 P660,000 C. d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On April 1, 2021, Carter Company began offering a new product for sale under a
one-year warranty. Of the 5,000 units in inventory on April 1, 2021, 3,000 had
been sold by June 30, 2021. Based on its experience with similar products, the
entity estimated that the average warranty cost per unit sold would be P160.
Actual warranty costs incurred from April 1 through June 30, 2021 were
$140.000.
On June 30, 2021, the amount to be reported as warranty liability is:
C.
$340,000
d. P660,000
a.
$180,000
b. $240,000
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