Question

On December 31, the warranty liability was estimated to be $100,000. On January 16 of the following year, it was learned that one week before, on January 9, poor-quality materials were introduced into the production process. This mistake is expected to create an additional $87,000 in warranty repairs. The financial statements were issued on February 20. What amount should be reported as warranty liability in the December 31 balance sheet?



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  • CreatedJanuary 28, 2012
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