Homework SourseMultiple Choice Question 117 Bramble manufactures highend wh
Multiple Choice Question 117
Bramble manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $310 per unit sold and reported a liability for estimated warranty costs $10.3 million at the beginning of this year. If during the current year, the company sold 60100 units for a total of $325 million and paid warranty claims of $11980000 on current and prior year sales, what amount of liability would the company report on its balance sheet at the end of the current year?
B.
C.
D.
| A. $6651000. |
Solution
Answer
Beginning balance
$10,300,000
Claims paid
$(11,980,000)
Current year sale\'s warranty [60100 units x $310]
$18,631,000
Ending Balance reported in Balance Sheet
$16,951,000
| Beginning balance | $10,300,000 |
| Claims paid | $(11,980,000) |
| Current year sale\'s warranty [60100 units x $310] | $18,631,000 |
| Ending Balance reported in Balance Sheet | $16,951,000 |
