Warranty expense; change in estimate
Woodmier Lawn Products introduced a new line of commercial sprinklers in 2010 that carry a one-year warranty against manufacturer’s defects. Because this was the first product for which the company offered a warranty, trade publications were consulted to determine the experience of others in the industry. Based on that experience, warranty costs were expected to approximate 2% of sales. Sales of the sprinklers in 2010 were $2.5 million.
Accordingly, the following entries relating to the contingency for warranty costs were recorded during the first year of selling the product:
| Accrued liability and expense | |
| Warranty expense (2% x $ 2,500,000) | 50,000 |
| Estimated warranty liability | 50,000 |
| Actual expenditures (summary entry) | |
| Estimated warranty liability | 23,000 |
| Cash, wages payable, parts and supplies, etc. | 23,000 |
Economic Debate- Progressive Income Tax For this Economic Debate, we are going to discuss the…
TOPIC: Going Global Discussion Thread 1 (initial post due Wednesday for full credit) Please note:…
Assignment Topic This week will culminate in the creation of a narrated PowerPoint to create…
The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. Assignments submitted…
you need to post your 2-page information flier to share with your Final Project Group.…
discussion: Discuss the methods used at your company to measure and ensure quality products and…