Problem 3-9 (AICPA Adapted)Mill Company sells washing machines that carry a three-yearwarranty against manufacturer's defects. Based on entityexperience, warranty costs are estimated at P300 per machine.During the current year, the entity sold 2,400 washingmachines and paid warranty costs of P170,000.1. What amount should be reported as warranty expensefor the current year?a. 170,000b. 240,000c. 550,000.d. 720,0002. What amount should be reported as estimated warrantyliability at year-end?a. 550,000b. 720,000170,000C.d.0Problem 3-10 (AICPA Adapted)Bold Company estimated annual warranty expense at 2% ofannual net sales. The net sales for the current year amountedto P4,000,000.At the beginning of current year, the warranty liability wasP60,000 and the warranty payments during the current yeartotaled P50,000.1. What amount should be reported as warranty expensefor the current year?a. 70,000b. 50,000c. 80,000d. 60,0002. What amount should be reported as estimated warrantyliability at year-end?a. 10,000b. 70,000c. 80,000d. 90,000

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Problem 3-9 (AICPA Adapted) Mill Company sells washing machines that carry a three-year warranty against manufacturer's defects. Based on entity experience, warranty costs are estimated at P300 per machine. During the current year, the entity sold 2,400 washing machines and paid warranty costs of P170,000. 1. What amount should be reported as warranty expense for the current year? a. 170,000 b. 240,000 c. 550,000. d. 720,000 2. What amount should be reported as estimated warranty liability at year-end? a. 550,000 b. 720,000 170,000 0 C. d.

Problem 3-9 (AICPA Adapted) Mill Company sells washing machines that carry a three-year warranty against manufacturer's defects. Based on entity experience, warranty costs are estimated at P300 per machine. During the current year, the entity sold 2,400 washing machines and paid warranty costs of P170,000. 1. What amount should be reported as warranty expense for the current year? a. 170,000 b. 240,000 c. 550,000. d. 720,000 2. What amount should be reported as estimated warranty liability at year-end? a. 550,000 b. 720,000 170,000 0 C. d.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 14P: Assurance-Type Warranty Clean-All Inc. sells washing machines with a 3-year assurance-type warranty....

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