Both Polaris and Arctic Cat provide warranties on the products they sell. Accurate estimates of these future
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1. Read the “Product warranties” section of the “Organization and Significant Accounting Policies” foot-note for Polaris. For each of the three years reported, compare the dollar amounts of the annual warranty expense and actual warranty claims paid. Is Polaris’ warranty expense higher, lower, or about the same as its warranty claims paid?
2. Read the “Product Warranties” section of the “Summary of Significant Accounting Policies” footnote for Arctic Cat. For each of the three years reported, compare the dollar amounts of the annual warranty expense and actual warranty claims paid. Is Arctic Cat’s warranty expense higher, lower, or about the same as its warranty claims paid?
3. Using the answers from parts (1) and (2), which company made more accurate estimates of warranty costs over the most recent three years?
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Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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