Valix Finacc vol 2 Problem 1-32

Financial Accounting Volume 2 2008 Valix-Peralta
Chapter 1 Problem 1-32

Problem 1-32  Answer  B

Warranty expense:

            2008 (5,000,000 x 7%)                                                                                    350,000

            2009 (7,000,000 x 7%)                                                                                    490,000

840,000

Warranty costs:

            2008                                                                                        100,000

            2009                                                                                        300,000           400,000

Warranty liability – December 31, 2009                                                                     440,000