Cameron Company sells 2,000 units of its product for $500 each in 2017. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $100 per unit. In 2017, warranty contracts are honoured on 40 units for a total cost of $4,000. What amount will be reported on Cameron Company's balance sheet as Estimated Warranty Liability on December 31, 2017?

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The Answer of Cameron Company sells 2,000 units of its product for $500 each in 2017. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $100 per unit. In 2017, warranty contracts are honoured on 40 units for a total cost of $4,000. What amount will be reported on Cameron Company's balance sheet as Estimated Warranty Liability on December 31, 2017?

Cameron Company Sells 2,000 Units of Its Product for $500