Question

General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows:


GM’s sales were $135,592 million in Year 2. Assume that the total paid on warranty claims during Year 2 was $3,000 million.
a. Why are short- and long-term estimated warranty liabilities separately disclosed?
b. Provide the journal entry for the Year 2 product warranty expense.
c. What two conditions must be met in order for a product warranty liability to be reported in the financialstatements?


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  • CreatedFebruary 28, 2014
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