Bonita manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products...
Bonita manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $290 per unit sold and reported a liability for estimated warranty costs $10.6 million at the beginning of this year. If during the current year, the company sold 59000 units for a total of $326 million and paid warranty claims of $12090000 on current and prior year sales, what amount of liability would the company report on its balance sheet at the end of the current year?
Homework Answers
| Liability at the beginning of year | 10600000 | |
| Add: Warranty costs for the year | 17110000 | =59000*290 |
| Less: Warranty claims paid | -12090000 | |
| Warranty Liability at the end of the current year | 15620000 |
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