Join IDNLearn.com to access a wealth of knowledge and get your questions answered by experts. Join our Q&A platform to get accurate and thorough answers to all your pressing questions.

Clinicke Inc. sells merchandise of $800,000 in 2020 that includes a two-year limited warranty against manufacturing defects as part of the selling price. Warranty costs are estimated to be 1% of sales. If the company incurred $2,200 of actual costs in responding to warranty claims in 2020 (related to 2020 sales), how much should Clinicke record in warranty expense for 2020

Sagot :

Answer:

the amount recorded in the warranty expense is $8,000

Explanation:

The computation of the amount recorded in the warranty expense is shown below:

= Sale value of merchandise inventory × estimated percentage

= $800,000 × 1%

= $8,000

hence, the amount recorded in the warranty expense is $8,000

So the above formula should be applied

Your engagement is important to us. Keep sharing your knowledge and experiences. Let's create a learning environment that is both enjoyable and beneficial. Your questions deserve precise answers. Thank you for visiting IDNLearn.com, and see you again soon for more helpful information.