*see attachedWhat amount should RIS report as a liability at December 31, 2021?a. P 0b. P 26,000c. P 38,000d. P 116,000 During 2020, RIS Inc. introduced a new line of machines that carry a two-year warranty againstmanufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of salesin the year of sale and 4% in the year after sale. Sales and actual warranty expenditures for thefirst two-year period were as followsActualWarrantySales2020#6,000202140,000P46,000400,0001,000,0001,400,000#

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What amount should RIS report as a liability at December 31, 2021? a. P 0 b. P 26,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

*see attached

What amount should RIS report as a liability at December 31, 2021?
a. P 0
b. P 26,000
c. P 38,000
d. P 116,000

During 2020, RIS Inc. introduced a new line of machines that carry a two-year warranty against
manufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of sales
in the year of sale and 4% in the year after sale. Sales and actual warranty expenditures for the
first two-year period were as follows
Actual
Warranty
Sales
2020
#
6,000
2021
40,000
P
46,000
400,000
1,000,000
1,400,000
#

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