Wall Company sold a product under a two year warranty. The estimated cost of warranty repairs is 2% of net sales. During the 1st two years in business, the entity made the following sales and incurred the following warranty repair costs: 2019 2020 Net Sales 2,500,000 3,000,000 Total Repair Costs Incurred 45,000 50,000 What amount should be reported as warranty expense for 2020? O 60,000 O 50,000 O 10,000 O 59,000
Wall Company sold a product under a two year warranty. The estimated cost of warranty repairs is 2% of net sales. During the 1st two years in business, the entity made the following sales and incurred the following warranty repair costs: 2019 2020 Net Sales 2,500,000 3,000,000 Total Repair Costs Incurred 45,000 50,000 What amount should be reported as warranty expense for 2020? O 60,000 O 50,000 O 10,000 O 59,000
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.5P
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![Wall Company sold a product under a two year warranty. The estimated cost of warranty
repairs is 2% of net sales. During the 1st two years in business, the entity made the following
sales and incurred the following warranty repair costs:
2020
2019
2,500,000 3,000,000
Net Sales
Total Repair Costs Incurred 45,000 50,000
What amount should be reported as warranty expense for 2020?
O
60,000
50,000
10,000
59,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F750e216b-aea6-4491-8ff2-1a52738f980d%2F9024371f-b782-4d29-8baa-d2b7fa905b11%2Fy4vfue_processed.png&w=3840&q=75)
Transcribed Image Text:Wall Company sold a product under a two year warranty. The estimated cost of warranty
repairs is 2% of net sales. During the 1st two years in business, the entity made the following
sales and incurred the following warranty repair costs:
2020
2019
2,500,000 3,000,000
Net Sales
Total Repair Costs Incurred 45,000 50,000
What amount should be reported as warranty expense for 2020?
O
60,000
50,000
10,000
59,000
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