In 2017, Song Company introduces a new product that includes a two-year warranty on parts. During 2017,

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In 2017, Song Company introduces a new product that includes a two-year warranty on parts. During 2017, 4,400 units are sold for $450 each. The cost of each unit was $175. The company estimates that 5% of the units will be defective and that the average warranty cost will be $85 per unit. The company has a December 31 fiscal year end and prepares adjusting entries on an annual basis. Prepare an adjusting entry at December 31, 2017, to accrue the estimated warranty cost.
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Accounting Principles

ISBN: 978-1119048503

7th Canadian Edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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