Adamson sells a product with a four-year warranty.Warranty costs are estimated as a percentage of sales as follows:
Additional data:
Required:
a. If the modified cash method is in use, what would be warranty expense for 2011 ?
b. If the expense warraty acculat method is in use, what woutd be warranty expense for 2011 ?
c. If the expense warraty acculal method is in use, what amount of liability for warranties would be chsclosed on the balance sheet on December 31, 2012?
Correct Answer:
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