Respuesta :
A warranty is a seller's obligation to replace a product that fails to perform as expected within a certain time frame. The cost of repairing the item is derived from the seller of the product in this case.
(a) The company sold a $4,800 copier for $6,000 with an expected warranty cost of 4%.
The calculation for warranty expenses:-
Warranty expenses = rate of warranty * sales price
= 4% * $6000
= $240
Therefore, In 2015, the company recorded $240 as a warranty expense.
(b) Calculation of estimated warranty liability reported as of 31st December 2015 is as below.
Estimated Warranty expenses = rate of warranty * sales price
= 4% * $6000
= $240
Hence, as of 31st December 2015, the estimated warranty liability is $240.
(c) In 2016, the company spent $209 to repair the copier. And this amount is deducted from the estimated warranty liability. The company provided a two-year parts warranty, with warranty costs charged in 2015.
As a result, no additional warranty expenses for the copier were reported in 2016.
(d) The following is a calculation of the estimated warranty liability for the copier as of December 31st, 2016.
Estimated warranty liability = Estimated liability in the previous year - Warranty expense
= $240 - $209
= $31
As of December 31st, 2016, the estimated warranty liability for this copier is $31.
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