Kohl Co. provides warranties for many of its products. The January 1, 2010, balance of the Estimated Warranty Liability account was $70,400. Based on an analysis of warranty claims during the past several years, this year's warranty provision was established at 0.4% of sales. During 2010 the actual cost of servicing products under warranty was $31,200, and sales were $7,200,000.
(a) What amount of Warranty Expense will appear on Kohl Co.'s income statement for the year ended December 31, 2010?
Warranty Expense $:________
(b) What amount will be reported in the Estimated Warranty Liability account on the December 31, 2010, balance sheet?
Estimated Warranty Liability $:___________© BrainMass Inc. brainmass.com June 4, 2020, 1:01 am ad1c9bdddf
This solution provides assistance with estimating the warranty liability and expense.