Sony introduces a new compact music player to compete with Apple's iPod that carries a two-year warranty
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Sony introduces a new compact music player to compete with Apple's iPod that carries a two-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 2% of sales. By the end of the first year of selling the product, total sales are $30 million, and actual warranty expenditures are $200,000. What amount (if any) should Sony report as a liability at the end of the year?
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Financial Accounting
ISBN: 9780078110825
2nd Edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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