[Answer] In 2010 Payton Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products the estimated warranty costs related to dollar sales are as follows:First year of warranty 2%Second year of warranty 5% Sales and actual warranty expenditures for 2010 and 2011 are presented below: 2010 2011 Sales $300 000 $400 000Actual warranty expenditures 10 000 20 000 What is the estimated warranty liability at the end of 2011?a. $19 000.b. $29 000.c. $49 000.d. $8 000.

Answer: a
In 2010 Payton Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products the estimated warranty costs related to dollar sales are as follows:First year of warranty 2%Second year of wa…

Leave a Reply