On December 31,2015,Estimated Warranty Payable is reported on the balance sheet for White Decker Company.The liability pertains to products sold in 2015 with five year warranties.How should the Estimated Warranty Payable be reported on the balance sheet at December 31,2015?

Question

Quizplus · Accepted Answer

The Estimated Warranty Payable should be reported as both a current liability and a long-term liability. The portion of the liability that is expected to be paid within one year should be reported as a current liability, and the remaining portion that extends beyond one year should be reported as a long-term liability.

On December 31,2015,Estimated Warranty Payable Is Reported on the Balance