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7nadin3 [17]
3 years ago
7

"Sony introduces a new compact music player to compete with Apple’s iPod that carries a two-year warranty against manufacturer’s

defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 2% of sales. By the end of the first year of selling the product, total sales are $30 million, and actual warranty expenditures are $200,000. What amount (if any) should Sony report as a liability at the end of the year?"
Business
1 answer:
kvv77 [185]3 years ago
4 0

Answer:

$400,000

Explanation:

Total sales × Percentage of sales

=$30,000,000 X 0.02%

= $600,000

($600,000 - $200,000)

= $400,000

Therefore the amount (if any) that Sony should report as a liability at the end of the year will be $400,000

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Answer:

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