Panther Co. had a quality-assurance warranty liability of $350,000 at the beginning of 2018 and $310,000 at the end of 2018. Warranty expense is based on 4% of sales, which were $50 million for the year. What were the warranty expenditures for 2018?
A) $0.
B) $1,960,000.
C) $2,000,000.
D) $2,040,000.

Question

Quizplus · Accepted Answer

11ea937b_3600_482a_a419_e7f4ceb9a4ba_TB2599_00 ($50,000,000 × 4%) = 2,000,000
$350,000 + $2,000,000 - $310,000 = $2,040,000