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

Assume that GM€™s sales were $166,380 million in the current year and that the total paid on warranty claims during the current year was $3,710 million.
a. Why are short- and long-term estimated warranty liabilities separately disclosed?

b. Provide the journal entry for the current year product warranty expense.

c. What two conditions must be met in order for a product warranty liability to be reported in the financial statements?

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(in millions) Current Year Prior Year $3,487 5,792 $9,279 Current estimated product warranty payable Noncurrent estimated product warranty payable Total $3,517 6,184 $9,701