Tech it Easy (TECH) sells computers and laptops. Tech includes a four-year warranty on each computer/Ipad they sell. Management estimates that the cost of providing the warranty coverage is 5% of sales in the first year and 1% of sales in each of years two and three and 1% in year four. Other facts follow: . TECH reported a $180,000 provision for warranty payable on its December 31, 2022 balance sheet. . TECHS sales for 2023 were $3,780,000 . The cost to TECH of meeting their warranty claims in 2023 was $320,000; $180,000 for parts and $240,000 for labor. TECH's sales for 2024 were $2,890,000. The cost to TECH of meeting their warranty claims in 2024 was $168,000; $80,800 for parts and $87,200 for labor. TECH's sales for 2025 were $1,975,000. . . The cost to TECH of meeting their warranty claims in 2025 was $154,000; $95,000 for parts and $59,000 for labor. What is the balance of the warranty payable account at December 31, 2025?
Tech it Easy (TECH) sells computers and laptops. Tech includes a four-year warranty on each computer/Ipad they sell. Management estimates that the cost of providing the warranty coverage is 5% of sales in the first year and 1% of sales in each of years two and three and 1% in year four. Other facts follow: . TECH reported a $180,000 provision for warranty payable on its December 31, 2022 balance sheet. . TECHS sales for 2023 were $3,780,000 . The cost to TECH of meeting their warranty claims in 2023 was $320,000; $180,000 for parts and $240,000 for labor. TECH's sales for 2024 were $2,890,000. The cost to TECH of meeting their warranty claims in 2024 was $168,000; $80,800 for parts and $87,200 for labor. TECH's sales for 2025 were $1,975,000. . . The cost to TECH of meeting their warranty claims in 2025 was $154,000; $95,000 for parts and $59,000 for labor. What is the balance of the warranty payable account at December 31, 2025?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 10RE
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning