Question

Excom manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $225 per unit sold and reported a liability for estimated warranty costs $7.8 million at the beginning of this year. If during the current year, the company sold 60,000 units for a total of $243 million and paid warranty claims of $9,000,000 on current and prior year sales, what amount of liability would the company report on its balance sheet at the end of the current year? (assume accrual method)

Answer 1

warranties liabilities 12.300.000,00

Step-by-step explanation:

Warranty cost 225

Company sold 60000

estimate warranties 7.800.000,00

Warranties FY 13.500.000,00

Warranty claims -9.000.000,00

warranties liabilities 12.300.000,00