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-   -   Warranty Expense (https://www.askmehelpdesk.com/showthread.php?t=294344)

  • Dec 21, 2008, 03:37 AM
    g00034234
    Warranty Expense
    Rama, Inc. offers a two-year warranty against failure of its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 2005 and 2006 were: $2,000,000 and $2,500,000, respectively. What is the warranty liability for 2005:
  • Dec 21, 2008, 01:42 PM
    pready

    Sales of $2,000,000 * 4% for the first year
  • Dec 21, 2008, 11:03 PM
    batates
    isn't it 2,000,000 * 0.1 = 200,000
    ?

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