5. During Year 3, Great Adventures sold 150 dune buggies for $4,000 each. The dune buggies...
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5. During Year 3, Great Adventures sold 150 dune buggies for $4,000 each. The dune buggies carry a five-year warranty for defects. Estimates are that repair costs will average 4% of the total selling price. The warranty liability at the beginning of the year was $14,000, and $20,000 in claims was actually incurred during Year 3 to honour warranties. |
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What was the warranty expense for Year 3?
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Homework Answers
Answer: d. $24,000
Explanation
Warranty expense for Year 3 = 150 x $4,000 x 4%
= $ 24,000
Add Answer to:
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