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frutty [35]
3 years ago
6

Ranch Company estimates warranty expense as 5% of sales. On January 1, warranties payable was $13,000. During the year Ranch pai

d $5,000 to meet its warranty obligations and recorded sales of $120,000. The December 31 liability for the warranty is
Business
1 answer:
Yuki888 [10]3 years ago
3 0

Answer:

$13,000

Explanation:

The computation of the december 31 liability for the warranty is shown below:

Given that

Warranty expense = 5% of sales

Warranty payable = $13,000

Paid amount = $5,000

Sales = $120,000

based on the above information

The warranty liability as on Dec 31 would be equivalent to the warranty payable i.e. $13,000

The same is to be considered

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