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quester [9]
3 years ago
11

Carpenter Inc. had a balance of $88,000 in its quality-assurance warranty liability account as of December 31, 2020. In 2021, Ca

rpenter's warranty expenditures paid were $453,000. Its warranty expense is calculated as 1% of sales. Sales in 2021 were $40.8 million. What was the balance in the warranty liability account as of December 31, 2021
Business
1 answer:
Luba_88 [7]3 years ago
4 0

Answer:

$43,000

Explanation:

Warranty expense for 2021 = $40.8 millions * 1%

Warranty expense for 2021 = $408,000

Balance in Liability on 31 Dec =  Warranty Liability on 1 Jan + Warranty Expenses - Warranty Expense paid

Balance in Liability on 31 Dec = $88,000 + $408,000 - $453,000

Balance in Liability on 31 Dec = $43,000

So, the balance in the warranty liability account as of December 31, 2021 is $43,000.

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