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Estimated warranty
Fords Motor Company disclosed estimated product warranty provision for comparative years as follows.
Current estimated product warranty payable $12,953 (2008) $14,082 (2007) Non Current estimated product warranty payable 7,359 (2008) 7,728 (2007) Total (in million) $20,312 $21,810 Ford's sales were $147,128 million in 2007 and increased to $153,503 million in 2008. Assume that the total paid on warranty claims during 2008 was $12,000 million. a. Why are short and long term estimated warranty provisions separately disclosed? b. Provide the journal entry for the 2008 product warranty expense |
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