Mariano Corporation sells 7,000 units of inventory during the first year of operations for $300 each. The
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Mariano Corporation sells 7,000 units of inventory during the first year of operations for $300 each. The selling price includes a one−year warranty on parts. It is estimated that 4% of the units will be defective and that repair costs are estimated to be $30 per unit. In the year of sale, warranty contracts are honored on 70 units for a total cost of $2,100. What amount will be reported as Estimated Warranty Liability at the end of the year?
A. $8,400
B. $2,520
C. $6,300
D. $2,100
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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