In 2020, Hydrogen Corp. 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 dollar sales are as follows: Hydrogen uses the expense approach to account for warranties. What is the estimated warranty liability at the end of 2021?
A) $ 73,500
B) $ 43,500
C) $ 28,500
D) $ 12,000

Question

In 2020, Hydrogen Corp. 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 dollar sales are as follows:  Hydrogen uses the expense approach to account for warranties. What is the estimated warranty liability at the end of 2021?
A) $ 73,500 
B) $ 43,500 
C) $ 28,500 
D) $ 12,000

Quizplus · Accepted Answer

The Answer of In 2020, Hydrogen Corp. 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 dollar sales are as follows:  Hydrogen uses the expense approach to account for warranties. What is the estimated warranty liability at the end of 2021?
A) $ 73,500 
B) $ 43,500 
C) $ 28,500 
D) $ 12,000