In 2014, Pollard Corporation 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:First year of warranty 3%Second year of warranty 5%Sales and actual warranty expenditures for 2014 and 2015 are presented below: What is the estimated warranty liability at the end of 2015?(assume the accrual method)
A) $16,000.
B) $64,000.
C) $96,000.
D) $20,000.

Question

In 2014, Pollard Corporation 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:First year of warranty 3%Second year of warranty 5%Sales and actual warranty expenditures for 2014 and 2015 are presented below:  What is the estimated warranty liability at the end of 2015?(assume the accrual method)
A) $16,000. 
B) $64,000. 
C) $96,000. 
D) $20,000.

Quizplus · Accepted Answer

The Answer of In 2014, Pollard Corporation 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:First year of warranty 3%Second year of warranty 5%Sales and actual warranty expenditures for 2014 and 2015 are presented below:  What is the estimated warranty liability at the end of 2015?(assume the accrual method)
A) $16,000. 
B) $64,000. 
C) $96,000. 
D) $20,000.

In 2014, Pollard Corporation Began Selling a New Line of Products