Julia Used Cars offers a one-year warranty from the date of sale on all cars it sells. From historic data, Bill Julia estimates that, on average, each car will require the company to incur warranty cost of $820. The following activities occurred during 2010.
If the January 1, 2010 beginning balance in the warranty liability account was $2,500, what would be the year-end warranty liability balance?
a. $31,200
b. $16,200
c. $11,200
d. $13,700

Question

Julia Used Cars offers a one-year warranty from the date of sale on all cars it sells. From historic data, Bill Julia estimates that, on average, each car will require the company to incur warranty cost of $820. The following activities occurred during 2010.
  If the January 1, 2010 beginning balance in the warranty liability account was $2,500, what would be the year-end warranty liability balance? 
a. $31,200
b. $16,200
c. $11,200
d. $13,700

Quizplus · Accepted Answer

The Answer of Julia Used Cars offers a one-year warranty from the date of sale on all cars it sells. From historic data, Bill Julia estimates that, on average, each car will require the company to incur warranty cost of $820. The following activities occurred during 2010.
  If the January 1, 2010 beginning balance in the warranty liability account was $2,500, what would be the year-end warranty liability balance? 
a. $31,200
b. $16,200
c. $11,200
d. $13,700

Julia Used Cars Offers a One-Year Warranty from the Date