In 2019, Shiftry Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows:    First year of warranty                            2%    Second year of warranty                       5%   Sales and actual expenditures for 2019 and 2020 are presented below:         2019       2020 Sales    450,000    600,000 Actual warranty expenditures       15,000      30,000   What is the estimated warranty liability at the end of 2020?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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In 2019, Shiftry Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows:

   First year of warranty                            2%

   Second year of warranty                       5%

 

Sales and actual expenditures for 2019 and 2020 are presented below:

 

      2019

      2020

Sales

   450,000

   600,000

Actual warranty expenditures

      15,000

     30,000

 

What is the estimated warranty liability at the end of 2020?

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