E. An entity sells washing machines that carry a three-year warranty against manufacturer's defects. Based on the entity's experience, warranty costs are estimated at P300 per machine. During the year, the entity sold 2,400 washing machines and paid warranty costs of P170,000. What amount should be reported as estimated warranty liability at year-end?

E. An entity sells washing machines that carry a three-year warranty against manufacturer's defects. Based on the entity's experience, warranty costs are estimated at P300 per machine. During the year, the entity sold 2,400 washing machines and paid warranty costs of P170,000. What amount should be reported as estimated warranty liability at year-end?

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 10RE

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