Exhibit 9-5
Backhoe Company estimates its annual warranty costs to be 4% of annual net sales. Backhoe uses the GAAP approach of accruing warranty expense and the related liability) in the year of the sale. The following information relates to the calendar year 2015:
-Refer to Exhibit 9-5. The amount of warranty expense for 2015 is

Question

Exhibit 9-5
Backhoe Company estimates its annual warranty costs to be 4% of annual net sales. Backhoe uses the GAAP approach of accruing warranty expense and the related liability) in the year of the sale. The following information relates to the calendar year 2015: 
-Refer to Exhibit 9-5. The amount of warranty expense for 2015 is

Quizplus · Accepted Answer

The correct choice is $120,000, as it is the amount specified in the exhibit for warranty expense for the year 2015.

Exhibit 9-5 Backhoe Company Estimates Its Annual Warranty Costs to Be 4