FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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What would be the
a. A debit to Warranty Expense of P 123,000 and a credit to Warranty Liability of P 123,000
b. A debit to Warranty Expense of P 150,000 and a credit to Warranty Liability of P 150,000
c. A debit to Warranty Expense of P 75,000 and a credit to Warranty Liability of P 75,000
d. A debit to Warranty Expense of P 61,500 and a credit to Warranty Liability of P 61,500
Transcribed Image Text:LEYI Co., sells an electric timer that carries a 90-day unconditional warranty against product failure.
The warranty costs of known failures have already been reflected in the records.
Based on reliable statistical analysis, 2% of units sold will require an average cost of P 150 per unit
October
November
December
Units sold
16,000
14,000
20,000
Known product failures from sale of:
October
80
160
80
November
40
140
December
90
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