During 2012,Gardner Home Center sold 800 power washers for $350 each.The power washers carry a 2-year warranty for repairs.Estimates indicate that repair costs will average 2% of sales.How much warranty expense should be accrued as a result of the 2012 sales of this product?
A) $8,400
B) $5,600
C) $2,800
D) No liability should be recorded until units are brought in for repairs.
Correct Answer:
Verified
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