Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,091 units. It is estimated that warranty repairs will average $13 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of
a. $15,955
b. $37,228
c. $0
d. $53,183
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Warranty expense to be shown = Units sold * 13 per unit = 4091 * 13 = 53,183 Option D is the answer |
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Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,091...