Question

​A-Plus Appliances sells dishwashers with a​ four-year warranty. In​ 2019, sales revenue for dishwashers is​ $94,000. The company estimates warranty expense at​ 4.5% of revenues. What is the total estimated warranty payable of​ A-Plus Appliances as of December​ 31,2019? A-Plus Appliances began operating in 2019.​ (Round your final answer to the nearest​ dollar.)

Answer 1

$4230 is the correct answer to the given question .

Step-by-step explanation:

As Mention in the question the sales revenue to the dishwashers = $94,000

Also the company estimated warranty expense cost is =4.5% of revenues,

Now the estimated warranty payable can be determined by the following formula

`Annual\ sales\ revenue\ for \ the \ dishwashers\ * warranty\ expense\ revenues.`

`= \ 94000\ * \ 4.5\ % \ of \ revenues`

== $4230