Landfall Navigation began operations in 2014 and provides a one-year warranty on the products it sells. They estimate that 20,000 of the 400,000 units sold in 2014 will be returned for repairs and that these repairs will cost $8 per unit. The cost of repairing 16,000 units presented for service in 2014 was $128,000. Landfall should report a Warranty expense of $32,000 for 2014 Warranty expense of $160,000 for 2014. Warranty liability of $160,000 on Dec 31, 2014 No warranty obligation on Dec 31, 2014, since this is only a contingent liability.

Answer rating: 100% (QA)

Warranty expense 20000 8 160000 Warrant... View the full answer