Rubys & Rings Inc. offers a two-year assurance warranty against failure of its products. The estimated liability
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Ruby’s & Rings Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 2020 and 2021 were: $2,500,000 and $2,800,000, respectively. The company incurred no warranty costs in 2020 but in 2021 they spent $175,000 on repairs related to the warranties issued 2020 and 2021. The balance in the warranty provision account at the end of the 2021 year was
- $75,000.
- $280,000.
- $355,000.
- $530,000
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele
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