At January 1, 2017, the Estimated Warranty Payable is $1100. During 2017, the company recorded Warranty Expense of $19,500. During 2017, the company replaced defective products in accordance with product warranties at a cost of $12,000. What is the Estimated Warranty Payable at December 31, 2017?

Question

Quizplus · Accepted Answer

The Estimated Warranty Payable at December 31, 2017, is calculated by adding the Warranty Expense for the year ($19,500) to the beginning balance ($1,100) and then subtracting the cost of replacements made during the year ($12,000). This results in $8,600.

At January 1, 2017, the Estimated Warranty Payable Is $1100