7-37 Module 7 Current and Long-Term Liabilities Exercises LO1 E7-27. Analyzing and Computing Accrued Warranty Liability and Expense Canton Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years experience, Canton estimates that 3% of units sold each period will require repair at an average cost of $160 per unit. During the current period, Canton sold 100,000 units and repaired 2400 of those MBC units. a. How much warranty expense must Canton report in its current-period income statement? b. What warranty liability related to current-period sales will Canton report on its current period-end balance sheet? (Hint: Remember that some units were repaired in the current period.) c. What analysis issues must we consider with respect to reported warranty liabilities